Critical Contrast: Gold Resource (NYSE:GORO) vs. Rare Element Resources (OTCMKTS:REEMF)

Rare Element Resources (OTCMKTS:REEMFGet Rating) and Gold Resource (NYSE:GOROGet Rating) are both small-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Rare Element Resources and Gold Resource, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rare Element Resources 0 0 0 0 N/A
Gold Resource 0 0 0 0 N/A

Profitability

This table compares Rare Element Resources and Gold Resource’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rare Element Resources N/A -57.12% -48.52%
Gold Resource 6.64% 8.82% 5.74%

Institutional & Insider Ownership

0.0% of Rare Element Resources shares are held by institutional investors. Comparatively, 28.6% of Gold Resource shares are held by institutional investors. 2.5% of Rare Element Resources shares are held by company insiders. Comparatively, 1.1% of Gold Resource shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Rare Element Resources and Gold Resource’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rare Element Resources N/A N/A -$5.40 million ($0.03) -29.58
Gold Resource $125.20 million 1.31 $8.03 million $0.12 15.42

Gold Resource has higher revenue and earnings than Rare Element Resources. Rare Element Resources is trading at a lower price-to-earnings ratio than Gold Resource, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Rare Element Resources has a beta of -0.66, indicating that its stock price is 166% less volatile than the S&P 500. Comparatively, Gold Resource has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.

Summary

Gold Resource beats Rare Element Resources on 9 of the 10 factors compared between the two stocks.

Rare Element Resources Company Profile (Get Rating)

Rare Element Resources Ltd. engages in the exploration of mineral properties in the United States. It holds a 100% interest in the Bear Lodge property that comprises the Bear Lodge REE project and the Sundance Gold project located in central Crook County, northeast Wyoming. The company is headquartered in Littleton, Colorado.

Gold Resource Company Profile (Get Rating)

Gold Resource Corporation engages in the exploration, development, and production of gold and silver projects in Mexico and the United States. The company also explores for copper, lead, and zinc deposits. Its principal asset is the 100% owned Back Forty project covering approximately 1,304 hectares located in Menominee county, Michigan. The company was founded in 1998 and is headquartered in Denver, Colorado.

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