Critical Review: Kinross Gold (KGC) & Rare Element Resource (REEMF)

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Kinross Gold (NYSE:KGC) and Rare Element Resource (OTCMKTS:REEMF) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Volatility and Risk

Kinross Gold has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, Rare Element Resource has a beta of 3.43, indicating that its share price is 243% more volatile than the S&P 500.

Profitability

This table compares Kinross Gold and Rare Element Resource’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kinross Gold 6.85% 2.81% 1.60%
Rare Element Resource N/A -41.12% -22.12%

Institutional and Insider Ownership

53.7% of Kinross Gold shares are owned by institutional investors. Comparatively, 0.0% of Rare Element Resource shares are owned by institutional investors. 1.0% of Kinross Gold shares are owned by insiders. Comparatively, 5.7% of Rare Element Resource shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Kinross Gold and Rare Element Resource’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kinross Gold $3.30 billion 0.98 $445.40 million $0.14 18.50
Rare Element Resource N/A N/A -$850,000.00 N/A N/A

Kinross Gold has higher revenue and earnings than Rare Element Resource.

Analyst Ratings

This is a summary of recent ratings and price targets for Kinross Gold and Rare Element Resource, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinross Gold 1 7 4 0 2.25
Rare Element Resource 0 0 0 0 N/A

Kinross Gold currently has a consensus target price of $4.26, suggesting a potential upside of 64.51%. Given Kinross Gold’s higher possible upside, equities research analysts plainly believe Kinross Gold is more favorable than Rare Element Resource.

Summary

Kinross Gold beats Rare Element Resource on 8 of the 10 factors compared between the two stocks.

About Kinross Gold

Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, extraction, and processing of gold-containing ore. It also engages in the reclamation of gold mining properties; and production and sale of silver. The company's gold production and exploration activities are carried out principally in Canada, the United States, Russia, Brazil, Chile, Ghana, and Mauritania. The company was founded in 1972 and is headquartered in Toronto, Canada.

About Rare Element Resource

Rare Element Resources Ltd. explores for mineral properties in the United States. The company primarily explores for gold and rare earth element (REE) deposits. It holds a 100% interest in the Bear Lodge property that comprises the Bear Lodge REE project and the Sundance Gold project located in central Crook County, northeast Wyoming. Rare Element Resources Ltd. is headquartered in Littleton, Colorado.

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