Sunworks (NASDAQ: SUNW) and DAQO New Energy Corp. (NYSE:DQ) 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 risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Profitability

This table compares Sunworks and DAQO New Energy Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunworks -14.65% -52.21% -26.80%
DAQO New Energy Corp. 19.35% 18.90% 8.18%

Risk and Volatility

Sunworks has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500. Comparatively, DAQO New Energy Corp. has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sunworks and DAQO New Energy Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunworks 0 2 1 0 2.33
DAQO New Energy Corp. 0 0 2 0 3.00

Sunworks presently has a consensus target price of $2.75, indicating a potential upside of 57.14%. DAQO New Energy Corp. has a consensus target price of $37.50, indicating a potential upside of 46.03%. Given Sunworks’ higher probable upside, equities analysts plainly believe Sunworks is more favorable than DAQO New Energy Corp..

Insider and Institutional Ownership

5.5% of Sunworks shares are held by institutional investors. Comparatively, 30.2% of DAQO New Energy Corp. shares are held by institutional investors. 5.6% of Sunworks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Sunworks and DAQO New Energy Corp.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sunworks $81.34 million 0.48 -$10.35 million N/A N/A
DAQO New Energy Corp. $260.21 million 1.04 $116.94 million $4.72 5.44

DAQO New Energy Corp. has higher revenue and earnings than Sunworks.

Summary

DAQO New Energy Corp. beats Sunworks on 10 of the 12 factors compared between the two stocks.

About Sunworks

Sunworks, Inc., formerly Solar3D, Inc., provides photo voltaic (PV) based power systems for the residential, commercial and agricultural markets in California and Nevada. The Company, through its operating subsidiaries, designs, arranges financing, integrates, installs and manages systems ranging in size from 2 kilowatt (KW) for residential loads to multi megawatts (MW) systems for larger commercial projects. The Company’s commercial installations include office buildings, manufacturing plants, warehouses and agricultural facilities, such as farms, wineries and dairies. The Company provides a range of installation services to its solar energy customers, including design, system engineering, procurement, permitting, construction, grid connection, warranty, system monitoring and maintenance. The Company has installed over 850 systems in California and Nevada.

About DAQO New Energy Corp.

Daqo New Energy Corp. is a polysilicon manufacturer. The Company utilizes the chemical vapor deposition process, or the modified Siemens process, to produce polysilicon. The Company’s segments include Polysilicon and Wafer. The Company manufactures and sells polysilicon to photovoltaic product manufacturers, whereby the polysilicon is processed into ingots, wafers, cells and modules for solar power solutions. The Company offers ready-to-use polysilicon, packaged to meet crucible stacking, pulling and solidification needs. The Company offers wafers through its downstream photovoltaic product manufacturing business. The Company also provides wafer original equipment manufacturer (OEM) service to external customers through tolling agreements by processing polysilicon to produce ingot and wafer. Its annual capacity for polysilicon is approximately 12,150 metric tons (MT) in Xinjiang. The Company’s wafer manufacturing annual capacity is approximately 90 million pieces.

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