Head-To-Head Contrast: Constellium (NYSE:CSTM) and USA Rare Earth (NASDAQ:USAR)

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

Volatility & Risk

USA Rare Earth has a beta of 2.58, indicating that its stock price is 158% more volatile than the S&P 500. Comparatively, Constellium has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Profitability

This table compares USA Rare Earth and Constellium’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%
Constellium	5.69%	51.66%	9.63%

Insider and Institutional Ownership

92.6% of Constellium shares are held by institutional investors. 9.1% of USA Rare Earth shares are held by company insiders. Comparatively, 1.2% of Constellium shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for USA Rare Earth and Constellium, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USA Rare Earth	1	0	10	0	2.82
Constellium	0	2	4	1	2.86

USA Rare Earth presently has a consensus target price of $33.71, indicating a potential upside of 105.64%. Constellium has a consensus target price of $35.80, indicating a potential upside of 34.53%. Given USA Rare Earth’s higher possible upside, analysts clearly believe USA Rare Earth is more favorable than Constellium.

Earnings & Valuation

This table compares USA Rare Earth and Constellium”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USA Rare Earth	$1.64 million	2,229.72	-$297.56 million	($2.43)	-6.75
Constellium	$8.45 billion	0.43	$273.00 million	$3.88	6.86

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

Summary

Constellium beats USA Rare Earth on 10 of the 15 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 Constellium

Constellium SE, together with its subsidiaries, engages in the design, manufacture, and sale of rolled and extruded aluminum products for the packaging, aerospace, automotive, defense, and other transportation and industry end-markets. The company operates through three segments: Packaging & Automotive Rolled Products, Aerospace & Transportation, and Automotive Structures & Industry. The Packaging & Automotive Rolled Products segment produces rolled aluminum products, including can stock and closure stock for the beverage and food industry, as well as foil stock for the flexible packaging market. This segment also supplies automotive body sheets and heat exchangers for the automotive market; and specialty reflective sheets. The Aerospace & Transportation segment provides rolled aluminum products, including aerospace plates, sheets, and extrusions; and aerospace wing skins, as well as plates and sheets for use in transportation, industry, and defense applications. The Automotive Structures & Industry segment offers extruded aluminium products and aluminium structural components for the automotive industry, including crash-management systems, body structures, side impact beams, and battery enclosures; and fabricates hard and soft alloy extruded profiles for various industry applications in the automotive, engineering, rail, and other transportation end markets. This segment also provides downstream technology and services, which include pre-machining, surface treatment, research and development, and technical support services. It sells its products directly or through distributors in France, Germany, the Czech Republic, the United Kingdom, Switzerland, and the United States, as well as Shanghai, and Seoul. The company was incorporated in 2010 and is headquartered in Paris, France.