Financial Contrast: USA Rare Earth (NASDAQ:USAR) and Worthington Steel (NYSE:WS)

USA Rare Earth (NASDAQ:USAR) and Worthington Steel (NYSE:WS) are both mid-cap materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and recommmendations for USA Rare Earth and Worthington Steel, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USA Rare Earth	1	0	10	0	2.82
Worthington Steel	1	1	1	0	2.00

USA Rare Earth presently has a consensus target price of $33.71, suggesting a potential upside of 216.12%. Worthington Steel has a consensus target price of $46.00, suggesting a potential upside of 16.54%. Given USA Rare Earth’s stronger consensus rating and higher possible upside, equities analysts clearly believe USA Rare Earth is more favorable than Worthington Steel.

Profitability

This table compares USA Rare Earth and Worthington Steel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
USA Rare Earth	N/A	-9.04%	-7.13%
Worthington Steel	-0.56%	7.49%	3.14%

Insider & Institutional Ownership

45.4% of Worthington Steel shares are held by institutional investors. 9.1% of USA Rare Earth shares are held by insiders. Comparatively, 2.7% of Worthington Steel shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares USA Rare Earth and Worthington Steel”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USA Rare Earth	$13.16 million	198.29	-$297.56 million	($2.43)	-4.39
Worthington Steel	$5.30 billion	0.38	$8.50 million	($0.61)	-64.70

Worthington Steel has higher revenue and earnings than USA Rare Earth. Worthington Steel is trading at a lower price-to-earnings ratio than USA Rare Earth, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

USA Rare Earth has a beta of 2.66, indicating that its share price is 166% more volatile than the S&P 500. Comparatively, Worthington Steel has a beta of 2.24, indicating that its share price is 124% more volatile than the S&P 500.

Summary

USA Rare Earth beats Worthington Steel on 8 of the 14 factors compared between the two stocks.

About USA Rare Earth

USA Rare Earth, Inc. is domestic supplier of rare earth magnets and heavy rare earth elements. It is developing a vertically integrated, domestic supply chain for rare earth element magnet production, with a facility in Stillwater, Oklahoma, and mining rights to the Round Top heavy rare earth and critical minerals deposit in West Texas. The company was founded in May 2019 and is headquartered in Stillwater, OK.

About Worthington Steel

Worthington Steel, Inc. operates as a steel processor in North America. It offers carbon flat-rolled steel and tailor welded blanks, as well as electrical steel laminations; and aluminum tailor welded blanks. The company serves various end-markets, including automotive, heavy truck, agriculture, construction, and energy. Worthington Steel, Inc. was incorporated in 2023 and is based in Columbus, Ohio.