Comparing USA Rare Earth (NASDAQ:USAR) & Constellium (NYSE:CSTM)

Constellium (NYSE:CSTM) and USA Rare Earth (NASDAQ:USAR) are both mid-cap materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Profitability

This table compares Constellium and USA Rare Earth’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Constellium	5.69%	51.66%	9.63%
USA Rare Earth	N/A	-9.04%	-7.13%

Institutional & Insider Ownership

92.6% of Constellium shares are owned by institutional investors. 1.2% of Constellium shares are owned by insiders. Comparatively, 9.1% of USA Rare Earth shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Constellium and USA Rare Earth, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Constellium	0	3	4	0	2.57
USA Rare Earth	1	0	10	0	2.82

Constellium presently has a consensus target price of $35.80, indicating a potential upside of 34.36%. USA Rare Earth has a consensus target price of $33.71, indicating a potential upside of 88.88%. Given USA Rare Earth’s stronger consensus rating and higher possible upside, analysts clearly believe USA Rare Earth is more favorable than Constellium.

Earnings & Valuation

This table compares Constellium and USA Rare Earth”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Constellium	$9.58 billion	0.38	$273.00 million	$3.88	6.87
USA Rare Earth	$1.64 million	2,427.60	-$297.56 million	($2.43)	-7.35

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

Risk and Volatility

Constellium has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, USA Rare Earth has a beta of 2.58, meaning that its share price is 158% more volatile than the S&P 500.

Summary

Constellium beats USA Rare Earth on 8 of the 14 factors compared between the two stocks.

About Constellium

Constellium SE, together with its subsidiaries, engages in the design, manufacture, and sale of rolled and extruded aluminum products for the packaging, aerospace, automotive, defense, and other transportation and industry end-markets. The company operates through three segments: Packaging & Automotive Rolled Products, Aerospace & Transportation, and Automotive Structures & Industry. The Packaging & Automotive Rolled Products segment produces rolled aluminum products, including can stock and closure stock for the beverage and food industry, as well as foil stock for the flexible packaging market. This segment also supplies automotive body sheets and heat exchangers for the automotive market; and specialty reflective sheets. The Aerospace & Transportation segment provides rolled aluminum products, including aerospace plates, sheets, and extrusions; and aerospace wing skins, as well as plates and sheets for use in transportation, industry, and defense applications. The Automotive Structures & Industry segment offers extruded aluminium products and aluminium structural components for the automotive industry, including crash-management systems, body structures, side impact beams, and battery enclosures; and fabricates hard and soft alloy extruded profiles for various industry applications in the automotive, engineering, rail, and other transportation end markets. This segment also provides downstream technology and services, which include pre-machining, surface treatment, research and development, and technical support services. It sells its products directly or through distributors in France, Germany, the Czech Republic, the United Kingdom, Switzerland, and the United States, as well as Shanghai, and Seoul. The company was incorporated in 2010 and is headquartered in Paris, France.

About USA Rare Earth

USA Rare Earth, Inc. is domestic supplier of rare earth magnets and heavy rare earth elements. It is developing a vertically integrated, domestic supply chain for rare earth element magnet production, with a facility in Stillwater, Oklahoma, and mining rights to the Round Top heavy rare earth and critical minerals deposit in West Texas. The company was founded in May 2019 and is headquartered in Stillwater, OK.