Head to Head Comparison: Rio Tinto (NYSE:RIO) versus Paladin Energy (OTCMKTS:PALAF)

Paladin Energy (OTCMKTS:PALAF) and Rio Tinto (NYSE:RIO) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for Paladin Energy and Rio Tinto, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paladin Energy	1	0	1	0	2.00
Rio Tinto	2	7	4	1	2.29

Paladin Energy currently has a consensus target price of $9.70, indicating a potential upside of 45.86%. Rio Tinto has a consensus target price of $101.75, indicating a potential upside of 11.38%. Given Paladin Energy’s higher probable upside, equities analysts plainly believe Paladin Energy is more favorable than Rio Tinto.

Insider and Institutional Ownership

0.0% of Paladin Energy shares are owned by institutional investors. Comparatively, 19.3% of Rio Tinto shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Paladin Energy has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Rio Tinto has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Profitability

This table compares Paladin Energy and Rio Tinto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paladin Energy	-7.08%	-1.90%	-1.44%
Rio Tinto	N/A	N/A	N/A

Valuation & Earnings

This table compares Paladin Energy and Rio Tinto”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paladin Energy	$177.68 million	16.82	-$44.64 million	($0.05)	-133.00
Rio Tinto	$57.64 billion	1.99	$9.97 billion	N/A	N/A

Rio Tinto has higher revenue and earnings than Paladin Energy.

Summary

Rio Tinto beats Paladin Energy on 9 of the 12 factors compared between the two stocks.

About Paladin Energy

Paladin Energy Ltd develops, explores for, owns, and operates uranium mines in Australia, Canada, and Africa. The company operates through Exploration, Namibia, and Australia segments. Its flagship project is the Langer Heinrich mine located in the Namib Desert in Namibia. The company was formerly known as Paladin Resources Ltd and changed its name to Paladin Energy Limited in November 2007. Paladin Energy Ltd was incorporated in 1993 and is headquartered in Perth, Australia.

About Rio Tinto

Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore, Aluminium, Copper, and Minerals Segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum production in Western Australia. The Aluminum segment is involved in bauxite mining; alumina refining; and aluminium smelting. The Copper segment engages in mining and refining of copper, gold, silver, molybdenum, and other by-products and exploration activities. The Minerals segment is involved in mining and processing of borates, titanium dioxide feedstock, and iron concentrate and pellets; diamond mining, sorting, and marketing; and development projects for battery materials, such as lithium. It also owns and operates open pit and underground mines; and refineries, smelters, processing plants and power, and shipping facilities. Rio Tinto Group was founded in 1873 and is headquartered in London, the United Kingdom.