Contrasting USA Rare Earth (NASDAQ:USAR) and OR Royalties (NYSE:OR)

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for OR Royalties and USA Rare Earth, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OR Royalties	0	5	3	1	2.56
USA Rare Earth	1	0	10	0	2.82

OR Royalties currently has a consensus price target of $41.00, suggesting a potential upside of 18.96%. USA Rare Earth has a consensus price target of $33.71, suggesting a potential upside of 145.37%. Given USA Rare Earth’s stronger consensus rating and higher possible upside, analysts plainly believe USA Rare Earth is more favorable than OR Royalties.

Insider and Institutional Ownership

68.5% of OR Royalties shares are owned by institutional investors. 9.1% of USA Rare Earth shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OR Royalties	78.04%	16.41%	14.51%
USA Rare Earth	N/A	-9.04%	-7.13%

Earnings & Valuation

This table compares OR Royalties 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
OR Royalties	$277.37 million	23.16	$206.09 million	$1.50	22.98
USA Rare Earth	$1.64 million	2,050.28	-$297.56 million	($2.43)	-5.65

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

Risk and Volatility

OR Royalties has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, USA Rare Earth has a beta of 2.66, suggesting that its share price is 166% more volatile than the S&P 500.

Summary

OR Royalties beats USA Rare Earth on 9 of the 15 factors compared between the two stocks.

About OR Royalties

Osisko Gold Royalties Ltd acquires and manages precious metal and other royalties, streams, and other interests in Canada and internationally. It also owns options on offtake; royalty/stream financings; and exclusive rights to participate in future royalty/stream financings on various projects. The company’s primary asset is a 3-5% net smelter return royalty on the Canadian Malartic complex located in Canada. In addition, it is involved in the exploration, evaluation, and development of mining projects. It primarily explores for precious metals, including gold, silver, diamond, and others. Osisko Gold Royalties Ltd was founded in 2014 and is headquartered in Montreal, Canada.

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.