USA Rare Earth (NASDAQ:USAR – Get Free Report) and Electra Battery Materials (NASDAQ:ELBM – Get Free Report) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
Profitability
This table compares USA Rare Earth and Electra Battery Materials’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| USA Rare Earth | N/A | -16.58% | -0.67% |
| Electra Battery Materials | N/A | -41.78% | -16.56% |
Analyst Ratings
This is a summary of recent ratings and price targets for USA Rare Earth and Electra Battery Materials, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| USA Rare Earth | 1 | 0 | 4 | 0 | 2.60 |
| Electra Battery Materials | 1 | 0 | 1 | 0 | 2.00 |
Insider & Institutional Ownership
32.9% of Electra Battery Materials shares are held by institutional investors. 46.6% of USA Rare Earth shares are held by company insiders. Comparatively, 22.7% of Electra Battery Materials shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Valuation and Earnings
This table compares USA Rare Earth and Electra Battery Materials”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| USA Rare Earth | N/A | N/A | $7.90 million | ($0.27) | -63.63 |
| Electra Battery Materials | N/A | N/A | -$21.49 million | ($1.23) | -0.85 |
USA Rare Earth is trading at a lower price-to-earnings ratio than Electra Battery Materials, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
USA Rare Earth has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Electra Battery Materials has a beta of 2.53, meaning that its share price is 153% more volatile than the S&P 500.
Summary
USA Rare Earth beats Electra Battery Materials on 7 of the 11 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 Electra Battery Materials
Electra Battery Materials Corporation engages in the acquisition and exploration of resource properties in the United States and Canada. It primarily explores for cobalt and silver deposits. The company's flagship project is the Iron Creek cobalt-copper project located in Lemhi County, Idaho. It also operates a cobalt refinery for producing battery materials for the electric vehicle supply chain. The company was formerly known as First Cobalt Corp. and changed its name to Electra Battery Materials Corporation in December 2021. Electra Battery Materials Corporation was incorporated in 2011 and is headquartered in Toronto, Canada.
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