New Gold (NYSE:NGD – Get Free Report) and American Lithium (OTCMKTS:LIACF – Get Free Report) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
Analyst Recommendations
This is a breakdown of current recommendations for New Gold and American Lithium, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| New Gold | 0 | 1 | 4 | 2 | 3.14 |
| American Lithium | 0 | 0 | 0 | 0 | 0.00 |
New Gold presently has a consensus price target of $4.13, suggesting a potential downside of 14.34%. Given New Gold’s stronger consensus rating and higher probable upside, analysts plainly believe New Gold is more favorable than American Lithium.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| New Gold | $941.50 million | 4.06 | -$64.50 million | $0.17 | 28.38 |
| American Lithium | N/A | N/A | -$18.80 million | ($0.11) | -2.25 |
American Lithium has lower revenue, but higher earnings than New Gold. American Lithium is trading at a lower price-to-earnings ratio than New Gold, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares New Gold and American Lithium’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| New Gold | 11.10% | 13.70% | 6.31% |
| American Lithium | N/A | -16.28% | -15.96% |
Volatility and Risk
New Gold has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, American Lithium has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.
Institutional & Insider Ownership
42.8% of New Gold shares are held by institutional investors. Comparatively, 0.0% of American Lithium shares are held by institutional investors. 0.2% of New Gold shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
New Gold beats American Lithium on 12 of the 14 factors compared between the two stocks.
About New Gold
New Gold Inc., an intermediate gold mining company, develops and operates of mineral properties in Canada. It primarily explores for gold, silver, and copper deposits. The company’s principal operating properties include 100% interest in the Rainy River mine located in Northwestern Ontario, Canada; and New Afton project situated in South-Central British Columbia. New Gold Inc. is headquartered in Toronto, Canada.
About American Lithium
American Lithium Corp., an exploration stage company, engages in the identification, acquisition, exploration, and development of resource properties in the United States. It principally focuses on the TLC Claystones project covering an area of approximately 5,052 hectares located in the town of Tonopah, Nevada; and the Falchani Lithium project and the Macusani Uranium project located in Puno, Peru. The company was formerly known as Menika Mining Ltd. and changed its name to American Lithium Corp. in April 2016. American Lithium Corp. was incorporated in 1974 and is headquartered in Vancouver, Canada.
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