Prospect Global Resources (OTCMKTS: PGRX) and Peabody Energy (OTCMKTS:BTUUQ) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Institutional & Insider Ownership

0.0% of Peabody Energy shares are held by institutional investors. 37.0% of Prospect Global Resources shares are held by company insiders. Comparatively, 1.3% of Peabody Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Prospect Global Resources and Peabody Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prospect Global Resources N/A N/A N/A
Peabody Energy -12.92% -179.69% -6.22%

Analyst Recommendations

This is a summary of current ratings and target prices for Prospect Global Resources and Peabody Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prospect Global Resources 0 0 0 0 N/A
Peabody Energy 0 0 1 0 3.00

Peabody Energy has a consensus target price of $33.00, suggesting a potential upside of 8,516.19%. Given Peabody Energy’s higher possible upside, analysts plainly believe Peabody Energy is more favorable than Prospect Global Resources.

Volatility and Risk

Prospect Global Resources has a beta of -4.42, suggesting that its share price is 542% less volatile than the S&P 500. Comparatively, Peabody Energy has a beta of -2.55, suggesting that its share price is 355% less volatile than the S&P 500.

Earnings & Valuation

This table compares Prospect Global Resources and Peabody Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Prospect Global Resources N/A N/A -$14.49 million N/A N/A
Peabody Energy N/A N/A N/A ($67.07) -0.01

About Prospect Global Resources

Prospect Global Resources Inc. (Prospect) is an engaged in the exploration and development of a potash deposit located in the Holbrook Basin of eastern Arizona, which it refers to as the Holbrook Project. The Holbrook Project consists of permits and leases on 147 mineral estate sections spanning approximately 90,000-acres in the Holbrook Basin of eastern Arizona, along the southern edge of the Colorado Plateau. The Company holds interest and control the Holbrook Project through its wholly owned subsidiary, AWP. Through AWP, the Company holds potash exploration permits on 38 Arizona state sections, own the mineral rights on eight private sections and hold leases for the mineral rights on 101 private sections which, in total, cover approximately 90,000-acres.

About Peabody Energy

Peabody Energy Corporation is a coal company, which is engaged in the mining of thermal coal for sale primarily to electric utilities and metallurgical coal for sale to industrial customers. Its mining operations are located in the United States and Australia. Its segments are Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, Trading and Brokerage, and Corporate and Other. It also markets and brokers coal from other coal producers, both as principal and agent, and trades coal and freight-related contracts through trading and business offices in Australia, China, Germany, India, Indonesia, the United Kingdom and the United States. Its other energy-related commercial activities include participating in operations of a mine-mouth coal-fueled generating plant, managing its coal reserve and real estate holdings, evaluating Btu Conversion projects and supporting the development of clean coal technologies.

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