Wealth Minerals (OTCMKTS:WMLLF) and Ferroglobe (NASDAQ:GSM) Critical Review

Ferroglobe (NASDAQ:GSM) and Wealth Minerals (OTCMKTS:WMLLF) are both small-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Volatility and Risk

Ferroglobe has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500. Comparatively, Wealth Minerals has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Earnings and Valuation

This table compares Ferroglobe and Wealth Minerals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferroglobe	$1.64 billion	0.51	$82.66 million	$0.34	13.21
Wealth Minerals	N/A	N/A	-$7.73 million	($0.04)	-1.63

Ferroglobe has higher revenue and earnings than Wealth Minerals. Wealth Minerals is trading at a lower price-to-earnings ratio than Ferroglobe, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

89.6% of Ferroglobe shares are owned by institutional investors. Comparatively, 0.1% of Wealth Minerals shares are owned by institutional investors. 13.1% of Ferroglobe shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Ferroglobe and Wealth Minerals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferroglobe	0	0	0	0	N/A
Wealth Minerals	0	0	0	0	N/A

Profitability

This table compares Ferroglobe and Wealth Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferroglobe	4.11%	11.27%	5.74%
Wealth Minerals	N/A	-21.47%	-21.11%

Summary

Ferroglobe beats Wealth Minerals on 10 of the 10 factors compared between the two stocks.

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 Wealth Minerals

Wealth Minerals Ltd., a junior mineral resource exploration company, engages in the acquisition, exploration, and development of mineral properties in Canada, Chile, Peru, and Mexico. The company primarily explores for lithium, as well as for precious metal and copper deposits. Its flagship property is the 100% owned Atacama project that comprises 144 exploration concessions covering an area of approximately 46,200 hectares located in the Atacama Salar in Region II of Antofagasta, northern Chile. Wealth Minerals Ltd. was incorporated in 1994 and is headquartered in Vancouver, Canada.