Critical Contrast: Rare Element Resources (OTCMKTS:REEMF) & American Resources (NASDAQ:AREC)

Rare Element Resources (OTCMKTS:REEMF) and American Resources (NASDAQ:AREC) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Volatility and Risk

Rare Element Resources has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, American Resources has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Institutional and Insider Ownership

9.3% of American Resources shares are owned by institutional investors. 1.3% of Rare Element Resources shares are owned by insiders. Comparatively, 1.8% of American Resources shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Rare Element Resources and American Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rare Element Resources	0	0	0	0	0.00
American Resources	1	0	4	0	2.60

American Resources has a consensus target price of $6.00, indicating a potential upside of 165.49%. Given American Resources’ stronger consensus rating and higher probable upside, analysts clearly believe American Resources is more favorable than Rare Element Resources.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rare Element Resources	N/A	-20.54%	-18.86%
American Resources	-27,532.48%	N/A	-19.65%

Earnings and Valuation

This table compares Rare Element Resources and American Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rare Element Resources	N/A	N/A	-$4.90 million	($0.01)	-69.50
American Resources	$380,000.00	635.95	-$39.25 million	($0.41)	-5.51

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

Summary

American Resources beats Rare Element Resources on 9 of the 13 factors compared between the two stocks.

About Rare Element Resources

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

About American Resources

American Resources Corporation, together with its subsidiaries, extracts, processes, transports, and sells metallurgical coal to the steel and industrial industries. It supplies raw materials; and sells coal used in pulverized coal injections. The company was founded in 2006 and is headquartered in Fishers, Indiana.