REX American Resources (NYSE: REX) and Pacific Ethanol (NASDAQ:PEIX) are both small-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Volatility & Risk

REX American Resources has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, Pacific Ethanol has a beta of 2.13, meaning that its stock price is 113% more volatile than the S&P 500.

Profitability

This table compares REX American Resources and Pacific Ethanol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
REX American Resources 6.26% 7.41% 6.37%
Pacific Ethanol -0.51% -2.13% -1.23%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for REX American Resources and Pacific Ethanol, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
REX American Resources 0 1 0 0 2.00
Pacific Ethanol 0 0 4 0 3.00

Pacific Ethanol has a consensus target price of $11.50, indicating a potential upside of 155.56%. Given Pacific Ethanol’s stronger consensus rating and higher possible upside, analysts plainly believe Pacific Ethanol is more favorable than REX American Resources.

Earnings & Valuation

This table compares REX American Resources and Pacific Ethanol’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
REX American Resources $453.80 million 1.33 $32.33 million $5.01 18.27
Pacific Ethanol $1.62 billion 0.12 $1.41 million ($0.23) -19.57

REX American Resources has higher earnings, but lower revenue than Pacific Ethanol. Pacific Ethanol is trading at a lower price-to-earnings ratio than REX American Resources, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

89.6% of REX American Resources shares are held by institutional investors. Comparatively, 80.4% of Pacific Ethanol shares are held by institutional investors. 12.2% of REX American Resources shares are held by insiders. Comparatively, 3.9% of Pacific Ethanol shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

REX American Resources beats Pacific Ethanol on 8 of the 13 factors compared between the two stocks.

About REX American Resources

Rex American Resources Corporation is a holding company. As of January 31, 2017, the Company had invested in three ethanol production entities. It operates through alternative energy segment. As of January 31, 2017, the Company’s ethanol investments include One Earth Energy, LLC (One Earth), NuGen Energy, LLC (NuGen) and Big River Resources, LLC (Big River). One Earth has its ethanol production facility in Gibson City, Illinois. NuGen operates an ethanol producing facility in Marion, South Dakota. Big River is a holding company for various entities, including Big River Resources West Burlington, LLC, which operates an ethanol plant in West Burlington, Iowa. Big River has interest in Big River United Energy, LLC, which operates an ethanol production facility located in Dyersville, Iowa. Big River has interest in an ethanol production facility, which is located in Boyceville, Wisconsin.

About Pacific Ethanol

Pacific Ethanol, Inc. (Pacific Ethanol) is a marketer and producer of low-carbon renewable fuels in the Western United States. Pacific Ethanol markets all the ethanol produced by four ethanol production facilities located in California, Idaho and Oregon, or the Pacific Ethanol Plants, all the ethanol produced by three other ethanol producers in the Western United States and ethanol purchased from other third-party suppliers throughout the United States. It also markets ethanol co-products, including wet distiller’s grains and syrup (WDG), for the Pacific Ethanol Plants. Its 83% ownership interest in New PE Holdco LLC, the owner of each of the plant holding companies, that collectively own the Pacific Ethanol Plants. Its ethanol customers are integrated oil companies and gasoline marketers who blend ethanol into gasoline. Effective September 02, 2014, Pacific Ethanol Inc raised its interest to 96% from 91%, by acquiring a 5% interest, in PE Op Co.

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