Analyzing Vivint Solar (VSLR) and Babcock & Wilcox Enterprises (BW)

Vivint Solar (NYSE: VSLR) and Babcock & Wilcox Enterprises (NYSE:BW) are both small-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

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This table compares Vivint Solar and Babcock & Wilcox Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vivint Solar 78.01% -24.76% -7.60%
Babcock & Wilcox Enterprises -24.38% -53.87% -13.38%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Vivint Solar and Babcock & Wilcox Enterprises, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vivint Solar 0 3 2 0 2.40
Babcock & Wilcox Enterprises 1 2 0 0 1.67

Vivint Solar currently has a consensus price target of $5.40, indicating a potential upside of 35.00%. Babcock & Wilcox Enterprises has a consensus price target of $6.25, indicating a potential upside of 64.04%. Given Babcock & Wilcox Enterprises’ higher probable upside, analysts plainly believe Babcock & Wilcox Enterprises is more favorable than Vivint Solar.

Valuation & Earnings

This table compares Vivint Solar and Babcock & Wilcox Enterprises’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vivint Solar $268.03 million 1.71 $209.09 million ($1.58) -2.53
Babcock & Wilcox Enterprises $1.56 billion 0.11 -$379.82 million ($4.00) -0.95

Vivint Solar has higher earnings, but lower revenue than Babcock & Wilcox Enterprises. Vivint Solar is trading at a lower price-to-earnings ratio than Babcock & Wilcox Enterprises, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

92.8% of Vivint Solar shares are owned by institutional investors. Comparatively, 77.2% of Babcock & Wilcox Enterprises shares are owned by institutional investors. 4.5% of Vivint Solar shares are owned by company insiders. Comparatively, 2.5% of Babcock & Wilcox Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Vivint Solar has a beta of -0.51, suggesting that its stock price is 151% less volatile than the S&P 500. Comparatively, Babcock & Wilcox Enterprises has a beta of 1.82, suggesting that its stock price is 82% more volatile than the S&P 500.

Summary

Vivint Solar beats Babcock & Wilcox Enterprises on 10 of the 14 factors compared between the two stocks.

Vivint Solar Company Profile

Vivint Solar, Inc. offers distributed solar energy, electricity generated by a solar energy system installed at or near customers’ locations, to residential customers. Through investment funds, the Company owns solar energy systems it installs and provides solar electricity pursuant to long-term contracts with its customers. The Company also sells solar energy systems outright to customers. The Company deploys its direct-to-home sales force to provide in-person professional consultations to prospective customers to evaluate the feasibility of installing a solar energy system at their residence. The Company’s systems use communication gateways and monitoring services to collect performance data. The Company operates in Arizona, California, Connecticut, Florida, Hawaii, Maryland, Massachusetts, New Jersey, New Mexico, New York, Pennsylvania, South Carolina, Texas and Utah. The Company purchases solar panels directly from multiple manufacturers.

Babcock & Wilcox Enterprises Company Profile

Babcock & Wilcox Enterprises, Inc. is a technology-based provider of fossil and renewable power generation and environmental equipment that includes a suite of boiler products and environmental systems, and services for power and industrial uses. The Company operates in three segments: Power, Renewable and Industrial. Through its Power segment, the Company provides the supply of and aftermarket services for steam-generating, environmental, and auxiliary equipment for power generation and other industrial applications. The Renewable segment provides steam-generating systems, environmental and auxiliary equipment for the waste-to-energy and biomass power generation industries, and plant operations and maintenance services for its systems and equipment. The Industrial segment focuses on custom-engineered cooling, environmental, noise abatement and industrial equipment along with related aftermarket services.

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