AngloGold Ashanti (NYSE:AU) vs. Avalon Rare Metals (OTCMKTS:AVLNF) Financial Contrast

Avalon Rare Metals (OTCMKTS:AVLNF) and AngloGold Ashanti (NYSE:AU) are both materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for Avalon Rare Metals and AngloGold Ashanti, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avalon Rare Metals	0	1	0	0	2.00
AngloGold Ashanti	1	3	5	1	2.60

AngloGold Ashanti has a consensus price target of $113.14, suggesting a potential upside of 19.10%. Given AngloGold Ashanti’s stronger consensus rating and higher probable upside, analysts plainly believe AngloGold Ashanti is more favorable than Avalon Rare Metals.

Profitability

This table compares Avalon Rare Metals and AngloGold Ashanti’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%
AngloGold Ashanti	32.19%	38.77%	25.72%

Institutional and Insider Ownership

36.1% of AngloGold Ashanti shares are held by institutional investors. 2.4% of Avalon Rare Metals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Avalon Rare Metals and AngloGold Ashanti”s gross 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	551.71	-$3.72 million	($117.86)	-0.04
AngloGold Ashanti	$11.82 billion	4.06	$2.64 billion	$7.46	12.73

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

Volatility & Risk

Avalon Rare Metals has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, AngloGold Ashanti has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Summary

AngloGold Ashanti beats Avalon Rare Metals on 13 of the 15 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 AngloGold Ashanti

AngloGold Ashanti plc operates as a gold mining company in Africa, Australia, and the Americas. The company primarily explores for gold, as well as produces silver and sulphuric acid as by-products. Its flagship property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania. AngloGold Ashanti plc was incorporated in 1944 and is headquartered in Greenwood Village, Colorado.