Avalon Advanced Materials (OTCMKTS:AVLNF) and Lithium Americas (OTCMKTS:LAC) Critical Review

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Avalon Advanced Materials (OTCMKTS:AVLNF) and Lithium Americas (NYSE:LAC) are both small-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Earnings & Valuation

This table compares Avalon Advanced Materials and Lithium Americas’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avalon Advanced Materials $50,000.00 299.69 -$2.53 million N/A N/A
Lithium Americas $4.84 million 73.90 -$28.27 million ($0.26) -15.46

Avalon Advanced Materials has higher earnings, but lower revenue than Lithium Americas.

Profitability

This table compares Avalon Advanced Materials and Lithium Americas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avalon Advanced Materials -7,614.63% -3.50% -3.36%
Lithium Americas -560.33% -26.10% -20.25%

Analyst Recommendations

This is a breakdown of current recommendations for Avalon Advanced Materials and Lithium Americas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avalon Advanced Materials 0 0 0 0 N/A
Lithium Americas 0 1 2 0 2.67

Insider and Institutional Ownership

0.0% of Avalon Advanced Materials shares are held by institutional investors. Comparatively, 5.5% of Lithium Americas shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Avalon Advanced Materials has a beta of -0.65, indicating that its share price is 165% less volatile than the S&P 500. Comparatively, Lithium Americas has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Summary

Lithium Americas beats Avalon Advanced Materials on 5 of the 9 factors compared between the two stocks.

About Avalon Advanced Materials

Avalon Advanced Materials Inc., together with its subsidiaries, engages in the exploration and development of mineral properties primarily in Canada. The company focuses on rare metals and minerals, including lithium, tantalum, niobium, cesium, indium, gallium, germanium, rare earth elements, yttrium, and zirconium, as well as tin. It focuses on the Nechalacho project, which comprises 5 contiguous mining leases covering an area of 10,449 acres and 3 claims covering an area of 4,597 acres located at Thor Lake in the Mackenzie Mining District of the Northwest Territories; the Separation Rapids Lithium project, which consists of 15 mineral claims and 1 mining claim lease covering an area of approximately 2,869 hectares located in the Paterson Lake Area of the Kenora Mining Division, Ontario; and the East Kemptville Tin-Indium project located northeast of Yarmouth in Yarmouth County, southwestern Nova Scotia. It also owns royalty interests in 2 exploration projects. The company was formerly known as Avalon Rare Metals Inc. and changed its name to Avalon Advanced Materials Inc. in February 2016. Avalon Advanced Materials Inc. was founded in 1991 and is headquartered in Toronto, Canada.

About Lithium Americas

Lithium Americas Corp. operates as a resource company in the United States. The company explores for lithium deposits. It primarily holds interests in the Cauchari-Olaroz Project located in Jujuy province of Argentina; and owns a 100% interest in the Thacker Pass lithium project located in Nevada. The company also manufactures and sells organoclay products that are used in complex oil and gas drilling and other applications. The company was formerly known as Western Lithium USA Corporation and changed its name to Lithium Americas Corp. in March 2016. Lithium Americas Corp. was incorporated in 2007 and is headquartered in Vancouver, Canada.

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