Agnico Eagle Mines (NYSE:AEM) versus MP Materials (NYSE:MP) Critical Review

MP Materials (NYSE:MP) and Agnico Eagle Mines (NYSE:AEM) are both materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations and price targets for MP Materials and Agnico Eagle Mines, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MP Materials	2	0	15	1	2.83
Agnico Eagle Mines	0	6	13	0	2.68

MP Materials currently has a consensus price target of $69.50, suggesting a potential upside of 85.40%. Agnico Eagle Mines has a consensus price target of $227.00, suggesting a potential upside of 27.23%. Given MP Materials’ stronger consensus rating and higher possible upside, equities research analysts clearly believe MP Materials is more favorable than Agnico Eagle Mines.

Valuation and Earnings

This table compares MP Materials and Agnico Eagle Mines”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MP Materials	$224.44 million	29.75	-$85.87 million	($0.22)	-170.39
Agnico Eagle Mines	$11.91 billion	7.58	$4.46 billion	$12.26	14.55

Agnico Eagle Mines has higher revenue and earnings than MP Materials. MP Materials is trading at a lower price-to-earnings ratio than Agnico Eagle Mines, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

MP Materials has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500. Comparatively, Agnico Eagle Mines has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares MP Materials and Agnico Eagle Mines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MP Materials	-9.90%	-0.05%	-0.03%
Agnico Eagle Mines	41.01%	21.68%	16.16%

Insider & Institutional Ownership

52.5% of MP Materials shares are held by institutional investors. Comparatively, 68.3% of Agnico Eagle Mines shares are held by institutional investors. 8.2% of MP Materials shares are held by company insiders. Comparatively, 0.5% of Agnico Eagle Mines shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Agnico Eagle Mines beats MP Materials on 8 of the 15 factors compared between the two stocks.

About MP Materials

MP Materials operates the Mountain Pass rare earth mine and processing facility in California. The site is a major North American source of rare earth materials, which are used in products such as electric vehicles, wind turbines, electronics and defense systems. The company mines and processes rare earth ore into concentrate and separated products, including neodymium-praseodymium (NdPr), a key input for high-strength permanent magnets. MP Materials is also developing domestic magnet manufacturing capabilities to extend its business further along the supply chain.

About Agnico Eagle Mines

Agnico Eagle Mines Limited (NYSE:AEM) is a Canadian gold mining company engaged in the exploration, development and production of gold, as well as related activities such as mineral processing and mine-site reclamation. The company’s principal product is gold, with silver and other byproducts also recovered from certain operations. Founded in 1957 through the merger of Agnico Mines and Eagle Mines, Agnico Eagle has grown into one of the world’s largest gold producers. Its operating portfolio is concentrated in established mining regions, including the Canadian provinces of Ontario and Quebec, Nunavut in northern Canada, and Finland.