Financial Comparison: Avalon Rare Metals (OTCMKTS:AVLNF) & First Majestic Silver (NYSE:AG)

Avalon Rare Metals (OTCMKTS:AVLNF) and First Majestic Silver (NYSE:AG) are both materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Risk & Volatility

Avalon Rare Metals has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, First Majestic Silver has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Avalon Rare Metals and First Majestic Silver, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avalon Rare Metals	0	1	0	0	2.00
First Majestic Silver	0	3	4	0	2.57

First Majestic Silver has a consensus target price of $24.00, indicating a potential upside of 47.10%. Given First Majestic Silver’s stronger consensus rating and higher probable upside, analysts clearly believe First Majestic Silver is more favorable than Avalon Rare Metals.

Earnings & Valuation

This table compares Avalon Rare Metals and First Majestic Silver”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avalon Rare Metals	$40,000.00	542.25	-$3.72 million	($117.86)	-0.04
First Majestic Silver	$1.26 billion	6.40	$164.92 million	$0.71	22.98

First Majestic Silver has higher revenue and earnings than Avalon Rare Metals. Avalon Rare Metals is trading at a lower price-to-earnings ratio than First Majestic Silver, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Avalon Rare Metals and First Majestic Silver’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avalon Rare Metals	-9,575.14%	-7.08%	-6.51%
First Majestic Silver	21.18%	13.36%	9.20%

Institutional and Insider Ownership

27.2% of First Majestic Silver shares are owned by institutional investors. 2.4% of Avalon Rare Metals shares are owned by company insiders. Comparatively, 0.9% of First Majestic Silver shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

First Majestic Silver beats Avalon Rare Metals on 11 of the 13 factors compared between the two stocks.

About Avalon Rare Metals

Avalon Advanced Materials Inc., together with its subsidiaries, engages in the acquisition, exploration, evaluation, and development of rare metal and mineral properties primarily in Canada. The company focuses on exploring lithium, tantalum, cesium, indium, gallium, germanium, tin, yttrium, and zirconium deposits, as well as rare earth elements. Its flagship project is the 100% owned Separation Rapids Lithium Project consisting of nineteen mineral claims and one mining lease covering an area of approximately 4,414 hectares located in the Paterson Lake Area, Kenora Mining Division, Ontario. The company was formerly known as Avalon Rare Metals Inc. and changed its name to Avalon Advanced Materials Inc. in February 2016. Avalon Advanced Materials Inc. is headquartered in Toronto, Canada.

About First Majestic Silver

First Majestic Silver Corp. engages in the acquisition, exploration, development, and production of mineral properties with a focus on silver and gold production in North America. Its projects include the San Dimas mine covering an area of approximately 71,867 hectares located in Durango State, Mexico; the Santa Elena that covers an area of approximately 102,244 hectares located in Sonora State, México; and the La Encantada covering an area of approximately 4,076 hectares located in Coahuila State, México. The company was formerly known as First Majestic Resource Corp. and changed its name to First Majestic Silver Corp. in November 2006. First Majestic Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.