Analyzing Elemental Royalty (NASDAQ:ELE) and Alpha Metallurgical Resources (NYSE:AMR)

Alpha Metallurgical Resources (NYSE:AMR) and Elemental Royalty (NASDAQ:ELE) are both small-cap materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Insider & Institutional Ownership

84.3% of Alpha Metallurgical Resources shares are held by institutional investors. 18.2% of Alpha Metallurgical Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Alpha Metallurgical Resources and Elemental Royalty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alpha Metallurgical Resources	$2.13 billion	0.94	-$61.69 million	($3.89)	-40.67
Elemental Royalty	$43.64 million	28.19	$1.77 million	$0.08	201.12

Elemental Royalty has lower revenue, but higher earnings than Alpha Metallurgical Resources. Alpha Metallurgical Resources is trading at a lower price-to-earnings ratio than Elemental Royalty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Alpha Metallurgical Resources and Elemental Royalty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alpha Metallurgical Resources	-2.37%	-3.29%	-2.20%
Elemental Royalty	4.01%	0.53%	0.46%

Analyst Recommendations

This is a breakdown of current ratings for Alpha Metallurgical Resources and Elemental Royalty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alpha Metallurgical Resources	1	6	0	0	1.86
Elemental Royalty	0	2	1	0	2.33

Alpha Metallurgical Resources presently has a consensus target price of $178.00, indicating a potential upside of 12.50%. Elemental Royalty has a consensus target price of $31.00, indicating a potential upside of 92.67%. Given Elemental Royalty’s stronger consensus rating and higher probable upside, analysts clearly believe Elemental Royalty is more favorable than Alpha Metallurgical Resources.

Summary

Elemental Royalty beats Alpha Metallurgical Resources on 9 of the 12 factors compared between the two stocks.

About Alpha Metallurgical Resources

Alpha Metallurgical Resources, Inc. is a U.S. coal producer focused primarily on metallurgical coal, a key input used to make steel. The company also produces thermal coal, which is used in electricity generation. Its mining operations are concentrated in Virginia and West Virginia, in the Central Appalachian coal region. Alpha sells coal to domestic and international customers, including steelmakers and power producers. The company operated as Contura Energy before adopting the Alpha Metallurgical Resources name in 2021, reflecting its emphasis on metallurgical coal and steelmaking markets.

About Elemental Royalty

Elemental Royalty Corporation is a precious-metals royalty company. It provides financing to mining companies in exchange for rights to a portion of future mineral production or revenue, allowing it to participate in mine output without directly operating the mines. The company’s portfolio includes royalties and other interests in producing mines and projects under development. Its assets span multiple regions, including Australia, Africa, and the Americas. The business traces its roots to the 2022 merger of Elemental Royalties and Altus Strategies.