Pacific Ethanol (NASDAQ: PEIX) and Green Plains (NASDAQ:GPRE) are both small-cap energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.
Earnings and Valuation
This table compares Pacific Ethanol and Green Plains’ revenue, earnings per share and valuation.
||Earnings Per Share
Green Plains has higher revenue and earnings than Pacific Ethanol. Pacific Ethanol is trading at a lower price-to-earnings ratio than Green Plains, indicating that it is currently the more affordable of the two stocks.
Green Plains pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. Pacific Ethanol does not pay a dividend. Green Plains pays out 67.6% of its earnings in the form of a dividend.
Volatility & Risk
Pacific Ethanol has a beta of 2.06, suggesting that its share price is 106% more volatile than the S&P 500. Comparatively, Green Plains has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.
Institutional & Insider Ownership
80.5% of Pacific Ethanol shares are held by institutional investors. 3.9% of Pacific Ethanol shares are held by insiders. Comparatively, 6.4% of Green Plains shares are held 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.
This table compares Pacific Ethanol and Green Plains’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
This is a summary of current recommendations and price targets for Pacific Ethanol and Green Plains, as provided by MarketBeat.
||Strong Buy Ratings
Pacific Ethanol currently has a consensus price target of $11.50, indicating a potential upside of 152.75%. Green Plains has a consensus price target of $25.33, indicating a potential upside of 52.61%. Given Pacific Ethanol’s higher possible upside, research analysts clearly believe Pacific Ethanol is more favorable than Green Plains.
Green Plains beats Pacific Ethanol on 10 of the 14 factors compared between the two stocks.
About Pacific Ethanol
Pacific Ethanol, Inc. (Pacific Ethanol) is a marketer and producer of low-carbon renewable fuels in the Western United States. Pacific Ethanol markets all the ethanol produced by four ethanol production facilities located in California, Idaho and Oregon, or the Pacific Ethanol Plants, all the ethanol produced by three other ethanol producers in the Western United States and ethanol purchased from other third-party suppliers throughout the United States. It also markets ethanol co-products, including wet distiller’s grains and syrup (WDG), for the Pacific Ethanol Plants. Its 83% ownership interest in New PE Holdco LLC, the owner of each of the plant holding companies, that collectively own the Pacific Ethanol Plants. Its ethanol customers are integrated oil companies and gasoline marketers who blend ethanol into gasoline. Effective September 02, 2014, Pacific Ethanol Inc raised its interest to 96% from 91%, by acquiring a 5% interest, in PE Op Co.
About Green Plains
Green Plains Inc. is an ethanol producer. The Company owns and operates assets throughout the ethanol value chain, including upstream, with grain handling and storage through its ethanol production facilities, and downstream, with marketing and distribution services. It operates through four segments: Ethanol Production, Agribusiness and Energy Services, Food and Food Ingredients, and Partnership. The ethanol production segment includes production of ethanol, distillers grains and corn oil. The agribusiness and energy services segment includes grain procurement. The food and food ingredients segment includes a cattle feedlot operation. The Company’s master limited partnership, Green Plains Partners LP (the partnership), provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses.
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