Reviewing SolarCity (SCTY) and JinkoSolar (JKS)

JinkoSolar (NYSE: JKS) and SolarCity (NASDAQ:SCTY) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent ratings for JinkoSolar and SolarCity, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
JinkoSolar 3 2 0 0 1.40
SolarCity 0 0 0 0 N/A

JinkoSolar presently has a consensus price target of $17.40, suggesting a potential downside of 28.75%. Given JinkoSolar’s higher probable upside, research analysts clearly believe JinkoSolar is more favorable than SolarCity.

Institutional & Insider Ownership

21.2% of JinkoSolar shares are owned by institutional investors. Comparatively, 40.0% of SolarCity shares are owned by institutional investors. 36.4% of SolarCity shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares JinkoSolar and SolarCity’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
JinkoSolar 5.42% 7.88% 1.70%
SolarCity -112.36% 22.92% -10.69%

Valuation and Earnings

This table compares JinkoSolar and SolarCity’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
JinkoSolar $3.08 billion 0.26 $263.10 million $6.05 4.04
SolarCity N/A N/A N/A ($0.31) -65.61

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

Summary

JinkoSolar beats SolarCity on 5 of the 8 factors compared between the two stocks.

JinkoSolar Company Profile

JinkoSolar Holding Co., Ltd. operates in the photovoltaic (PV) industry. The Company has built a vertically integrated solar power product value chain, from recovering silicon materials to manufacturing solar modules and solar power generation. The Company’s segments include the manufacturing segment and the solar power projects segment. The manufacturing segment comprises its vertically integrated solar power product manufacturing business, under which the Company manufactures silicon ingots, wafers, cells and solar modules. The solar power projects segment comprises the downstream solar power generation, construction and operation business, including power generation; engineering, procurement and construction (EPC), and connecting solar power projects to the grid, and operation and maintenance (O&M) of the solar power projects. The Company sells its solar modules under the JinkoSolar brand. Its services include solar system EPC and processing services.

SolarCity Company Profile

SolarCity Corporation is a United States-based solar provider. The Company is primarily engaged in the design, manufacture, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. It operates through solar energy products and services segment. It integrates the sales, engineering, manufacturing, installation, monitoring, maintenance and financing of its distributed solar energy systems. It offers its customers the option to either purchase and own solar energy systems or to purchase the energy that its solar energy systems produce through various contractual arrangements. It installs solar energy system at its customer’s premises and charge the customer a monthly fee for the power that its system produces. Its products, services and technologies include solar energy systems, customer agreements, grid control/energy storage systems, Zep Solar mounting systems and software.

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