LSI Industries (NASDAQ: LYTS) and Orion Energy Systems (NASDAQ:OESX) are both small-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitabiliy.

Valuation and Earnings

This table compares LSI Industries and Orion Energy Systems’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LSI Industries $328.82 million 0.49 $15.88 million $0.15 42.34
Orion Energy Systems $70.21 million 0.41 -$10.11 million ($0.56) -1.80

LSI Industries has higher revenue and earnings than Orion Energy Systems. Orion Energy Systems is trading at a lower price-to-earnings ratio than LSI Industries, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

LSI Industries has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Orion Energy Systems has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.

Institutional and Insider Ownership

76.5% of LSI Industries shares are held by institutional investors. Comparatively, 42.1% of Orion Energy Systems shares are held by institutional investors. 5.4% of LSI Industries shares are held by company insiders. Comparatively, 9.2% of Orion Energy Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares LSI Industries and Orion Energy Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LSI Industries 1.13% 3.77% 2.83%
Orion Energy Systems -23.70% -35.02% -21.21%

Analyst Recommendations

This is a summary of current ratings and recommmendations for LSI Industries and Orion Energy Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LSI Industries 0 1 1 0 2.50
Orion Energy Systems 0 2 1 0 2.33

LSI Industries currently has a consensus target price of $9.50, indicating a potential upside of 49.61%. Orion Energy Systems has a consensus target price of $2.00, indicating a potential upside of 98.02%. Given Orion Energy Systems’ higher possible upside, analysts clearly believe Orion Energy Systems is more favorable than LSI Industries.

Dividends

LSI Industries pays an annual dividend of $0.20 per share and has a dividend yield of 3.1%. Orion Energy Systems does not pay a dividend. LSI Industries pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

LSI Industries beats Orion Energy Systems on 11 of the 14 factors compared between the two stocks.

LSI Industries Company Profile

LSI Industries Inc. is a provider of corporate visual image solutions to the petroleum/convenience store industry. The Company designs and develops aspects of the solid-state light emitting diode (LED) lighting, from the electronic circuit board, to the software to drive and control the LEDs, to the structure of the LED product. It operates through three segments: Lighting, Graphics and Technology. The Lighting Segment manufactures and markets outdoor and indoor lighting and lighting controls for the commercial, industrial and multi-site retail markets, including the quick-service and automotive markets. The Graphics Segment manufactures and sells exterior and interior visual image elements related to signage and graphics, including integrated digital solutions. The Technology Segment designs, engineers, and manufactures electronic circuit boards, assemblies, lighting controls and large format solid state LED video displays. The Company provides a range of lighting control solutions.

Orion Energy Systems Company Profile

Orion Energy Systems, Inc. is a designer and manufacturer of lighting platforms. The Company researches, develops, designs, manufactures, markets, sells and implements energy management systems consisting primarily of commercial and industrial interior and exterior lighting systems, and related services. The Company operates through three segments: Orion U.S. Markets Division (USM), Orion Engineered Systems Division (OES) and Distribution Services Division (ODS). The USM division develops and sells its commercial lighting systems and energy management systems to the wholesale contractor markets. The OES division develops and sells lighting products, and provides construction and engineering services for its commercial light emitting diode (LED) and high intensity fluorescent (HIF) lighting and energy management systems. The ODS division focuses on selling its lighting products through manufacturer representative agencies and a network of broadline North American distributors.

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