Azure Power Global (NYSE: AZRE) and Vivint Solar (NYSE:VSLR) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Valuation & Earnings

This table compares Azure Power Global and Vivint Solar’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Azure Power Global $65.00 million 5.87 $46.61 million ($5.48) -2.69
Vivint Solar $171.05 million 3.23 -$84.91 million $0.55 9.09

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

Institutional and Insider Ownership

45.5% of Azure Power Global shares are held by institutional investors. Comparatively, 93.7% of Vivint Solar shares are held by institutional investors. 4.5% of Vivint Solar shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Azure Power Global and Vivint Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Azure Power Global -34.55% -37.63% -3.20%
Vivint Solar 36.54% -29.10% -9.35%

Analyst Recommendations

This is a summary of current ratings for Azure Power Global and Vivint Solar, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Azure Power Global 0 0 3 0 3.00
Vivint Solar 1 2 3 0 2.33

Azure Power Global presently has a consensus price target of $22.00, indicating a potential upside of 49.41%. Vivint Solar has a consensus price target of $5.67, indicating a potential upside of 13.33%. Given Azure Power Global’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Azure Power Global is more favorable than Vivint Solar.

Summary

Vivint Solar beats Azure Power Global on 6 of the 11 factors compared between the two stocks.

Azure Power Global Company Profile

Azure Power Global Limited is an India-based power producer. The Company sells solar power in India on long term fixed price contracts to its customers. The Company is also developing micro-grid applications for the highly fragmented and underserved electricity market in India. The Company operates approximately 20 utility scale projects and several commercial rooftop projects with a combined rated capacity of approximately 240 megawatts. The Company’s services include design, engineering and construction of grid integrated solar installations; off grid solar installations for villages, hamlets and remote areas; turnkey solar installations for commercial and residential complexes on roof tops, as back up and alternate source, and operation and maintenance of solar installations. The Company’s projects include Project Punjab, Rajasthan Projects, Gandhinagar Smart City Rooftop Project and Micro-Grids in Bihar and Uttar Pradesh.

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.

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