Some important properties used to compare permanent magnets are: remanence (M_r), which measures the strength of the magnetic field; coercivity (H_ci), the material's resistance to becoming demagnetized; energy product (BH_max), the density of magnetic energy; and Curie temperature (T_C), the temperature at which the material loses its magnetism. Neodymium magnets have higher remanence, much higher coercivity and energy product, but often lower Curie temperature than other types. Neodymium is alloyed with terbium and dysprosium in order to preserve its magnetic properties at high temperatures.The table below compares the magnetic performance of neodymium magnets with other types of permanent magnets.

The greater force exerted by rare earth magnets creates hazards that are not seen with other types of magnet. Neodymium magnets larger than a few cubic centimeters are strong enough to cause injuries to body parts pinched between two magnets, or a magnet and a metal surface, even causing broken bones.

Magnets allowed to get too near each other can strike each other with enough force to chip and shatter the brittle material, and the flying chips can cause injuries. There have even been cases where young children who have swallowed several magnets have had a fold of the digestive tract pinched between the magnets, causing injury or death. The stronger magnetic fields can be hazardous to mechanical and electronic devices, as they can erase magnetic media such as floppy disks and credit cards, and magnetize watches and other clockwork mechanisms and the shadow masks of CRT type monitors at a significant distance.

Neodymium magnets have replaced alnico and ferrite magnets in many of the myriad applications in modern technology where strong permanent magnets are required, because their greater strength allows the use of smaller, lighter magnets for a given application. Some examples are:

Demand for neodymium in electric vehicles is estimated to be 5 times larger than that in wind turbines.

In addition, the greater strength of neodymium magnets has inspired new applications in areas where magnets were not used before, such as magnetic jewelry clasps, children's magnetic building sets (and other neodymium magnet toys) and as part of the closing mechanism of modern sport parachute equipment.The strength and magnetic field homogeneity on neodymium magnets has also opened new applications in the medical field with the introduction of open magnetic resonance imaging (MRI) scanners used to image the body in radiology departments as an alternative to superconducting magnets that use a coil of superconducting wire to produce the magnetic field. As with most solid-based magnets, the magnetic field gradient of neodymium magnets decreases towards the centers of their surfaces, thus there is a force that attracts metallic objects to the edges.