Prospect Global Resources (OTCMKTS: PGRX) and Peabody Energy (NYSE:BTU) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of current recommendations for Prospect Global Resources and Peabody Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prospect Global Resources 0 0 0 0 N/A
Peabody Energy 0 2 7 0 2.78

Peabody Energy has a consensus target price of $35.63, indicating a potential upside of 6.95%. Given Peabody Energy’s higher probable upside, analysts plainly believe Peabody Energy is more favorable than Prospect Global Resources.

Profitability

This table compares Prospect Global Resources and Peabody Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prospect Global Resources N/A N/A N/A
Peabody Energy 4.60% 19.92% 2.74%

Valuation and Earnings

This table compares Prospect Global Resources and Peabody Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Prospect Global Resources N/A N/A N/A N/A N/A
Peabody Energy $4.72 billion 0.74 -$729.30 million N/A N/A

Prospect Global Resources has higher earnings, but lower revenue than Peabody Energy.

Insider & Institutional Ownership

95.1% of Peabody Energy shares are owned by institutional investors. 37.0% of Prospect Global Resources shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Peabody Energy beats Prospect Global Resources on 7 of the 8 factors compared between the two stocks.

Prospect Global Resources Company Profile

Prospect Global Resources Inc. (Prospect) is an engaged in the exploration and development of a potash deposit located in the Holbrook Basin of eastern Arizona, which it refers to as the Holbrook Project. The Holbrook Project consists of permits and leases on 147 mineral estate sections spanning approximately 90,000-acres in the Holbrook Basin of eastern Arizona, along the southern edge of the Colorado Plateau. The Company holds interest and control the Holbrook Project through its wholly owned subsidiary, AWP. Through AWP, the Company holds potash exploration permits on 38 Arizona state sections, own the mineral rights on eight private sections and hold leases for the mineral rights on 101 private sections which, in total, cover approximately 90,000-acres.

Peabody Energy Company Profile

Peabody Energy Corporation is a coal company. The Company’s segments include Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, Trading and Brokerage, and Corporate and Other. Its Powder River Basin Mining operations consist of its mines in Wyoming. Midwestern U.S. Mining operations reflect the Company‚Äôs Illinois and Indiana mining operations. Western U.S. Mining operations reflect the aggregation of the New Mexico, Arizona and Colorado mining operations. Australian Metallurgical Mining operations consist of mines in Queensland and New South Wales, Australia. Australian Thermal Mining operations consist of mines in New South Wales, Australia. Its Trading and Brokerage segment engages in the direct and brokered trading of coal and freight-related contracts through the trading and business offices. Its Corporate and Other includes selling and administrative expenses, and corporate hedging activities.

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