Molycorp (NYSE: MCP) and Ferroglobe PLC (NASDAQ:GSM) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitabiliy, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Molycorp and Ferroglobe PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Molycorp 0 0 1 0 3.00
Ferroglobe PLC 0 1 5 0 2.83

Molycorp currently has a consensus target price of $32.00, indicating a potential upside of 8,821.10%. Ferroglobe PLC has a consensus target price of $13.05, indicating a potential upside of 20.28%. Given Molycorp’s stronger consensus rating and higher probable upside, analysts clearly believe Molycorp is more favorable than Ferroglobe PLC.

Valuation & Earnings

This table compares Molycorp and Ferroglobe PLC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Molycorp N/A N/A N/A N/A N/A
Ferroglobe PLC $1.53 billion 1.22 $32.76 million N/A N/A

Ferroglobe PLC has higher revenue and earnings than Molycorp.

Profitability

This table compares Molycorp and Ferroglobe PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Molycorp -293.82% -250.99% -54.96%
Ferroglobe PLC N/A N/A N/A

Insider & Institutional Ownership

41.0% of Ferroglobe PLC shares are owned by institutional investors. 13.1% of Ferroglobe PLC shares are owned 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.

Dividends

Ferroglobe PLC pays an annual dividend of $0.32 per share and has a dividend yield of 2.9%. Molycorp does not pay a dividend.

Summary

Ferroglobe PLC beats Molycorp on 8 of the 10 factors compared between the two stocks.

Molycorp Company Profile

Molycorp, Inc. is a rare earths producer. The Company operates in four business segments: Resources, Chemicals and Oxides, Magnetic Materials and Alloys and Rare Metals. The Resources segment includes its operations at the Mountain Pass facility. The Chemicals and Oxides segment includes the production of rare earths at Molycorp Silmet; production of separated heavy rare earth oxides and other engineered materials from its Molycorp Jiangyin facility, and production of rare earths, salts of rare earth elements (REEs), zirconium-based engineered materials and mixed rare earth/zirconium oxides from its Molycorp Zibo facility. The Magnetic Materials and Alloys segment includes the production of Neo Powders through its wholly owned manufacturing facilities. The Rare Metals segment produces, reclaims, refines and markets niche metals and their compounds.

Ferroglobe PLC Company Profile

Ferroglobe PLC, formerly VeloNewco Limited, is engaged in silicon and specialty metals industry. The Company produces silicon metal and silicon- and manganese-based alloy, which serves customers in the chemical, aluminum, solar, steel and ductile iron foundry industries. It operates through two segments: Electrometallurgy and Energy. It Electrometallurgy segment includes its coal and quartz mining operations and its silicon metal and ferroalloy production, whereas the Energy segment consists of its hydroelectric power operations. It currently operates approximately 20 production smelting facilities in the field of electrometallurgy: approximately five in Spain, over five in the United States of America, over six in France, over three in South Africa, one in Venezuela, one in Poland, one in Canada, one in Argentina and one in China. It diversifies its production base across approximately five continents, such as Africa, Asia, Europe, North America and South America.

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