Head to Head Contrast: Sibanye Gold (NYSE:SBSW) and Avalon Rare Metals (OTCMKTS:AVLNF)

Sibanye Gold (NYSE:SBSW) 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 analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Risk and Volatility

Sibanye Gold has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Avalon Rare Metals has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sibanye Gold	N/A	N/A	N/A
Avalon Rare Metals	-11,117.69%	-4.47%	-4.11%

Earnings and Valuation

This table compares Sibanye Gold and Avalon Rare Metals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sibanye Gold	$7.25 billion	0.87	-$289.58 million	N/A	N/A
Avalon Rare Metals	$40,000.00	752.07	-$3.72 million	($0.01)	-3.60

Avalon Rare Metals has lower revenue, but higher earnings than Sibanye Gold.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Sibanye Gold and Avalon Rare Metals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sibanye Gold	1	2	2	0	2.20
Avalon Rare Metals	0	1	0	0	2.00

Sibanye Gold presently has a consensus price target of $19.93, suggesting a potential upside of 123.84%. Given Sibanye Gold’s stronger consensus rating and higher probable upside, equities analysts clearly believe Sibanye Gold is more favorable than Avalon Rare Metals.

Institutional & Insider Ownership

34.9% of Sibanye Gold shares are held by institutional investors. 0.1% of Sibanye Gold shares are held by insiders. Comparatively, 2.4% of Avalon Rare Metals shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Sibanye Gold beats Avalon Rare Metals on 9 of the 12 factors compared between the two stocks.

About Sibanye Gold

Sibanye Stillwater Limited, together with its subsidiaries, operates as a precious metals mining company in South Africa, the United States, Europe, and Australia. The company produces gold; platinum group metals (PGMs), including palladium, platinum, rhodium, iridium, and ruthenium; chrome; nickel; and silver, cobalt, and copper. It owns the East Boulder and Stillwater mines located in Montana, the United States; and Columbus metallurgical complex, which smelts the material mined to produce PGM-rich filter cake, as well as conducts PGM recycling activities. The company also involved in the Kroondal, Rustenburg, Marikana, and Platinum Mile operations situated in South Africa; Mimosa located on the southern portion in Zimbabwe; the Driefontein, Kloof, Rand Refinery, and Cooke surface operations located on the West Rand of the Witwatersrand Basin; and the Beatrix situated in the southern Free State. In addition, it owns an interest in surface tailings retreatment facilities; the Marathon PGM project in Ontario, Canada; the Altar and Rio Grande copper gold projects in the Andes in north-west Argentina; the Hoedspruit; and the Burnstone and southern Free State gold projects in South Africa. Sibanye Stillwater Limited was founded in 2013 and is headquartered in Weltevreden Park, South Africa.

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.