Real Goods Solar (NASDAQ: RGSE) and Installed Building Products (NYSE:IBP) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitabiliy, analyst recommendations and earnings.

Profitability

This table compares Real Goods Solar and Installed Building Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Real Goods Solar -159.31% -575.03% -85.04%
Installed Building Products 4.21% 26.42% 8.16%

Earnings and Valuation

This table compares Real Goods Solar and Installed Building Products’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Real Goods Solar $16.14 million 0.38 -$10.95 million ($496.98) 0.00
Installed Building Products $926.95 million 1.83 $110.12 million $1.24 43.27

Installed Building Products has higher revenue and earnings than Real Goods Solar. Real Goods Solar is trading at a lower price-to-earnings ratio than Installed Building Products, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Real Goods Solar has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500. Comparatively, Installed Building Products has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Institutional and Insider Ownership

6.0% of Real Goods Solar shares are held by institutional investors. Comparatively, 64.5% of Installed Building Products shares are held by institutional investors. 0.2% of Real Goods Solar shares are held by insiders. Comparatively, 32.9% of Installed Building Products shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Real Goods Solar and Installed Building Products, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Real Goods Solar 0 0 0 0 N/A
Installed Building Products 0 0 3 0 3.00

Installed Building Products has a consensus price target of $52.33, suggesting a potential downside of 2.45%. Given Installed Building Products’ higher probable upside, analysts clearly believe Installed Building Products is more favorable than Real Goods Solar.

Summary

Installed Building Products beats Real Goods Solar on 11 of the 12 factors compared between the two stocks.

About Real Goods Solar

Real Goods Solar, Inc. is a residential and commercial solar energy engineering, procurement, and construction company. The Company offers turnkey services, including design, procurement, permitting, build-out, grid connection, financing referrals and warranty and customer satisfaction activities. Its solar energy systems use solar photovoltaic (PV) modules. The Company operates in three segments: Residential – the installation of solar systems for homeowners, including lease financing thereof, and for small businesses (small commercial) in the continental United States; Sunetric – the installation of solar systems for both homeowners and small business owners (small commercial) in Hawaii, and Other – retail store and corporate operations.

About Installed Building Products

Installed Building Products, Inc. is a holding company. The Company is a residential insulation installer in the United States. As of December 31, 2016, the Company’s national platform included over 100 locations accessing customers in 48 continental states and the District of Columbia. The Company also installs complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, which provides cross-selling opportunities to supplement the insulation installation business. The Company manages various aspects of the installation process for the customers, from the direct purchase and receipt of materials from national manufacturers, to supply of materials to job sites and quality installation. The Company’s customers include production and custom homebuilders, multi-family and commercial contractors, and homeowners.

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