Vale (NYSE:VALE – Get Free Report) and Lithium Americas (NYSE:LAC – Get Free Report) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
21.9% of Vale shares are owned by institutional investors. 19.8% of Lithium Americas shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Vale and Lithium Americas”s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Vale | $38.06 billion | 1.20 | $7.98 billion | $1.44 | 7.01 |
Lithium Americas | N/A | N/A | -$3.93 million | ($0.12) | -24.63 |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Vale and Lithium Americas, as provided by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Vale | 0 | 7 | 3 | 0 | 2.30 |
Lithium Americas | 0 | 7 | 4 | 0 | 2.36 |
Vale presently has a consensus price target of $13.26, suggesting a potential upside of 31.32%. Lithium Americas has a consensus price target of $5.51, suggesting a potential upside of 86.50%. Given Lithium Americas’ stronger consensus rating and higher probable upside, analysts clearly believe Lithium Americas is more favorable than Vale.
Profitability
This table compares Vale and Lithium Americas’ net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Vale | 16.15% | 17.38% | 7.62% |
Lithium Americas | N/A | -5.59% | -5.29% |
Risk & Volatility
Vale has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Lithium Americas has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500.
Summary
Vale beats Lithium Americas on 8 of the 13 factors compared between the two stocks.
About Vale
Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services. The Energy Transition Materials segment produces and extracts nickel used to produce stainless steel, electric vehicles, and metal alloys; and its by-products, such as gold, silver, cobalt, precious metals, platinum, and others, as well as copper used in the construction sector to produce pipes and electrical wires. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.
About Lithium Americas
Lithium Americas Corp. engages in the exploration and development of lithium properties in the United States and Canada. It holds a 100% interest in the Thacker Pass project located in northern Nevada, as well as investments in exploration properties in the United States and Canada. Lithium Americas Corp. was incorporated in 2023 and is headquartered in Vancouver, Canada.
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