Financial Analysis: Avalon Rare Metals (OTCMKTS:AVLNF) versus Teck Resources (NYSE:TECK)

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

Institutional and Insider Ownership

78.1% of Teck Resources shares are owned by institutional investors. 0.1% of Teck Resources shares are owned by company insiders. Comparatively, 2.4% of Avalon Rare Metals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Teck Resources and Avalon Rare Metals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Teck Resources	0	12	7	1	2.45
Avalon Rare Metals	0	0	0	0	0.00

Teck Resources presently has a consensus price target of $58.00, suggesting a potential upside of 14.83%. Given Teck Resources’ stronger consensus rating and higher probable upside, equities analysts plainly believe Teck Resources is more favorable than Avalon Rare Metals.

Volatility and Risk

Teck Resources has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Avalon Rare Metals has a beta of 0.05, suggesting that its stock price is 95% less volatile than the S&P 500.

Earnings & Valuation

This table compares Teck Resources and Avalon Rare Metals”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Teck Resources	$7.70 billion	3.16	$1.00 billion	$2.02	25.00
Avalon Rare Metals	$40,000.00	960.14	-$3.72 million	N/A	N/A

Teck Resources has higher revenue and earnings than Avalon Rare Metals.

Profitability

This table compares Teck Resources and Avalon Rare Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Teck Resources	12.98%	5.90%	3.43%
Avalon Rare Metals	-5,445.83%	-4.27%	-3.94%

Summary

Teck Resources beats Avalon Rare Metals on 11 of the 13 factors compared between the two stocks.

About Teck Resources

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company operates through Steelmaking Coal, Copper, Zinc, and Energy segments. Its principal products include copper, zinc, steelmaking coal, and blended bitumen. The company also produces lead, silver, and molybdenum; and various specialty and other metals, chemicals, and fertilizers. In addition, it explores for gold. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. The company was founded in 1913 and is headquartered in Vancouver, Canada.

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.