Head-To-Head Contrast: Vale (NYSE:VALE) vs. Lithium Americas (NYSE:LAC)

Vale (NYSE:VALE) and Lithium Americas (NYSE:LAC) 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

Vale has higher revenue and earnings than Lithium Americas. Lithium Americas is trading at a lower price-to-earnings ratio than Vale, indicating that it is currently the more affordable of the two stocks.

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.