Comparing Nouveau Monde Graphite (NYSE:NMG) and Rio Tinto (NYSE:RIO)

Nouveau Monde Graphite (NYSE:NMG) and Rio Tinto (NYSE:RIO) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Risk & Volatility

Nouveau Monde Graphite has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Rio Tinto has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Valuation and Earnings

This table compares Nouveau Monde Graphite and Rio Tinto”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nouveau Monde Graphite	N/A	N/A	-$53.48 million	($0.35)	-5.54
Rio Tinto	$53.66 billion	1.49	$11.55 billion	$6.45	9.91

Rio Tinto has higher revenue and earnings than Nouveau Monde Graphite. Nouveau Monde Graphite is trading at a lower price-to-earnings ratio than Rio Tinto, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

41.1% of Nouveau Monde Graphite shares are held by institutional investors. Comparatively, 19.3% of Rio Tinto shares are held by institutional investors. 22.7% of Nouveau Monde Graphite shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Nouveau Monde Graphite and Rio Tinto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nouveau Monde Graphite	N/A	-47.42%	-35.20%
Rio Tinto	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current recommendations and price targets for Nouveau Monde Graphite and Rio Tinto, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nouveau Monde Graphite	0	0	2	0	3.00
Rio Tinto	0	4	3	2	2.78

Nouveau Monde Graphite currently has a consensus target price of $2.58, indicating a potential upside of 32.73%. Rio Tinto has a consensus target price of $73.00, indicating a potential upside of 14.20%. Given Nouveau Monde Graphite’s stronger consensus rating and higher possible upside, research analysts clearly believe Nouveau Monde Graphite is more favorable than Rio Tinto.

Summary

Rio Tinto beats Nouveau Monde Graphite on 8 of the 13 factors compared between the two stocks.

About Nouveau Monde Graphite

Nouveau Monde Graphite Inc. engages in the acquisition, exploration, development, and evaluation of mineral properties in Quebec, Canada. It primarily explores for graphite. The company’s flagship property is the 100% owned Matawinie graphite property including 176 mining claims covering an area of 9,264 hectares located in Quebec. It also involved in the real estate and trading activities. The company was formerly known as Nouveau Monde Mining Enterprises Inc. and changed its name to Nouveau Monde Graphite Inc. in February 2017. Nouveau Monde Graphite Inc. was founded in 2011 and is headquartered in Saint-Michel-Des-Saints, Canada.

About Rio Tinto

Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore, Aluminium, Copper, and Minerals Segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum production in Western Australia. The Aluminum segment is involved in bauxite mining; alumina refining; and aluminium smelting. The Copper segment engages in mining and refining of copper, gold, silver, molybdenum, and other by-products and exploration activities. The Minerals segment is involved in mining and processing of borates, titanium dioxide feedstock, and iron concentrate and pellets; diamond mining, sorting, and marketing; and development projects for battery materials, such as lithium. It also owns and operates open pit and underground mines; and refineries, smelters, processing plants and power, and shipping facilities. Rio Tinto Group was founded in 1873 and is headquartered in London, the United Kingdom.