Comparing Lithium Americas (Argentina) (NYSE:LAAC) & Ferroglobe (NASDAQ:GSM)

Ferroglobe (NASDAQ:GSM) and Lithium Americas (Argentina) (NYSE:LAAC) are both small-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility & Risk

Ferroglobe has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500. Comparatively, Lithium Americas (Argentina) has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Profitability

This table compares Ferroglobe and Lithium Americas (Argentina)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferroglobe	2.74%	7.55%	3.95%
Lithium Americas (Argentina)	N/A	-1.37%	-1.08%

Insider and Institutional Ownership

89.6% of Ferroglobe shares are owned by institutional investors. Comparatively, 49.2% of Lithium Americas (Argentina) shares are owned by institutional investors. 13.1% of Ferroglobe shares are owned by insiders. Comparatively, 19.8% of Lithium Americas (Argentina) shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Ferroglobe and Lithium Americas (Argentina)”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferroglobe	$1.65 billion	0.45	$82.66 million	$0.24	16.50
Lithium Americas (Argentina)	N/A	N/A	$1.29 billion	$7.79	0.37

Lithium Americas (Argentina) has lower revenue, but higher earnings than Ferroglobe. Lithium Americas (Argentina) is trading at a lower price-to-earnings ratio than Ferroglobe, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ferroglobe and Lithium Americas (Argentina), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferroglobe	0	0	0	0	0.00
Lithium Americas (Argentina)	0	4	3	1	2.63

Lithium Americas (Argentina) has a consensus price target of $7.05, indicating a potential upside of 146.50%. Given Lithium Americas (Argentina)’s stronger consensus rating and higher probable upside, analysts plainly believe Lithium Americas (Argentina) is more favorable than Ferroglobe.

About Ferroglobe

Ferroglobe PLC produces and sells silicon metal, and silicon and manganese-based ferroalloys in the United States, Europe, and internationally. It provides silicone chemicals that are used in a range of applications, including personal care items, construction-related products, health care products, and electronics; and silicon metal for primary and secondary aluminum producers. The company also offers silicomanganese, which is used as deoxidizing agent in the steel manufacturing process; and ferromanganese that is used as a deoxidizing, desulphurizing, and degassing agent in the removal of nitrogen and other harmful elements from steel. In addition, it offers ferrosilicon products that are used to produce stainless steel, carbon steel, and various other steel alloys, as well as to manufacture electrodes and aluminum; calcium silicon, which is used in the deoxidation and desulfurization of liquid steel, and production of coatings for cast iron pipes, as well as in the welding process of powder metal and in pyrotechnics; and nodularizers and inoculants, which are used in the production of iron. Further, the company provides silica fume, a by-product of the electrometallurgical process of silicon metal and ferrosilicon. Additionally, it operates quartz mines in South Africa, Spain, the United States, and Canada; and low-ash metallurgical coal mines in the United States; and a charcoal production facility in South Africa, as well as holds interests in hydroelectric power plant in France. The company serves silicone chemical producers; aluminum and steel manufacturers; auto companies and their suppliers; ductile iron foundries; manufacturers of photovoltaic solar cells and computer chips; and concrete producers. Ferroglobe PLC was formerly known as VeloNewco Limited and changed its name to Ferroglobe PLC in December 2015. The company was incorporated in 2015 and is headquartered in London, the United Kingdom.

About Lithium Americas (Argentina)

Lithium Americas (Argentina) Corp. operates as a resource company. The company explores for lithium deposits. The company owns interests in the Cauchari-Olaroz project located in Jujuy province of Argentina. It also has a pipeline of development and exploration stage projects, including the Pastos Grandes project and the Sal de la Puna project located in Salta Province in northwestern Argentina. Lithium Americas (Argentina) Corp. is headquartered in Vancouver, Canada.