My Favorite Rare Earth Stock To Buy For The Next 10 Years

Rare-earth metals are used in everything from your cellphone to high-tech missiles that countries stockpile for self-defense. Right now, most of the world's supply of rare-earth metals comes from China, a country that has shown it will use access to these vital metals as a geopolitical bargaining chip. Which is the first reason why MP Materials (NYSE: MP) is attractive as a long-term investment. The second reason is a bit more subtle.

What does MP Material do?

MP Materials has a rare-earth metals mining operation and a rare-earth metals processing business. Both are up and running, and they are both located in the United States. Even more impressive, MP Materials produced positive adjusted earnings of $0.03 per share in the first quarter of 2026. For investors looking at the rare-earth space, this company appears to have a sustainable, full-featured business.

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Basically, MP Materials has done a lot of hard work in a very short period of time. And that sets it apart from its peers. For example, TMC The Metals Company (NASDAQ: TMC) is seeking to develop an undersea mining operation. It's an interesting idea, but an operating mine is years away. The investment needed to build the proposed mine will likely leave The Metals Company bleeding red ink for years to come.

USA Rare Earth (NASDAQ: USAR) is further along in its development as a materials business. It has rare-earth metals processing assets that are operational today. However, it is still developing a rare-earth mine, so capital investment needs will remain elevated for the foreseeable future. And it is aggressively using acquisitions to build out its business. While buying other businesses can lead to rapid growth, such transactions also increase execution risk. And USA Rare Earth is still unprofitable.

In a high-risk area, hedging your bet makes sense

The truth is, rare-earth metals are still something of a developing industry. There's a huge opportunity, but it isn't clear which companies will be the long-term winners just yet. However, for most investors, sticking to the company with the most developed business is probably a good risk/reward balance. So, USA Rare Earth is likely to be more attractive than The Metals Company, and MP Materials is likely to be more attractive than USA Rare Earth.

Any one of these companies (or even all of them) could eventually be big winners. But MP Materials is the only one that is profitable now, with both its mining and processing businesses up and running. That's a compelling advantage if you plan to buy and hold a stock in a high-risk sector for a decade or more.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MP Materials. The Motley Fool has a disclosure policy.