8point3 Energy Partners (NASDAQ: CAFD) and TerraForm Power (NASDAQ:TERP) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares 8point3 Energy Partners and TerraForm Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
8point3 Energy Partners 23.87% 1.94% 1.11%
TerraForm Power -19.84% -4.59% -1.62%

Risk & Volatility

8point3 Energy Partners has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, TerraForm Power has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for 8point3 Energy Partners and TerraForm Power, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
8point3 Energy Partners 2 9 3 0 2.07
TerraForm Power 0 3 1 0 2.25

8point3 Energy Partners currently has a consensus target price of $15.54, indicating a potential upside of 10.22%. TerraForm Power has a consensus target price of $13.00, indicating a potential upside of 3.09%. Given 8point3 Energy Partners’ higher probable upside, research analysts plainly believe 8point3 Energy Partners is more favorable than TerraForm Power.

Dividends

8point3 Energy Partners pays an annual dividend of $1.06 per share and has a dividend yield of 7.5%. TerraForm Power does not pay a dividend.

Insider and Institutional Ownership

55.3% of 8point3 Energy Partners shares are owned by institutional investors. Comparatively, 81.9% of TerraForm Power shares are owned by institutional investors. 34.6% of TerraForm Power shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares 8point3 Energy Partners and TerraForm Power’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
8point3 Energy Partners N/A N/A N/A N/A N/A
TerraForm Power $654.56 million 2.40 $450.13 million ($1.47) -8.58

TerraForm Power has higher revenue and earnings than 8point3 Energy Partners.

Summary

8point3 Energy Partners beats TerraForm Power on 6 of the 11 factors compared between the two stocks.

8point3 Energy Partners Company Profile

8point3 Energy Partners LP owns, operates and acquires solar energy generation projects. As of November 30, 2016, Company’s portfolio comprised interests in 642 Megawatt (MW) of solar energy projects. The Company is developing projects under utility, commercial and industrial (C&I) and residential categories. As of November 30, 2016, the Company owned interests in nine utility-scale solar energy projects; four C&I solar energy projects, and a portfolio of residential Distributed generation (DG) Solar assets. The Company’s utility project portfolio comprises projects, which include Maryland Solar, Solar Gen 2, Lost Hills Blackwell, North Star, RPU, Quinto, Hooper and Kingbird. The Company’s C&I projects comprise UC Davis, Macy’s California, Macy’s Maryland and Kern. The Company’s residential portfolio targets homeowners in the United States.

TerraForm Power Company Profile

TerraForm Power, Inc. is a United States-based holding company. The Company owns clean power generation assets. This includes solar and wind assets located in the United States, Canada and other markets. Its clean power generation assets serve utility, commercial and residential customers. As of December 31, 2016, the Company’s portfolio consisted of renewable energy facilities located in the United States, Canada, the United Kingdom and Chile with a combined nameplate capacity of 2,983.1 megawatts. It owns and operates over 500 hundred wind and solar clean energy power installations. Its projects include Bluebird, River Mountains Solar, Laho Solar, SunE Perpetual Lindsday, Sandringham, California Public institutions and Summit Solar Projects. The Company holds interest in TerraForm Power, LLC (Terra LLC), which is an owner and operator of renewable energy facilities that have long-term contractual arrangements to sell the electricity generated by these facilities to third parties.

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