ESS Tech (NYSE:GWH – Get Free Report) and Sigma Lithium (NASDAQ:SGML – Get Free Report) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.
Profitability
This table compares ESS Tech and Sigma Lithium’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ESS Tech | -1,045.28% | -592.34% | -125.15% |
| Sigma Lithium | -24.13% | -35.97% | -9.94% |
Risk & Volatility
ESS Tech has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, Sigma Lithium has a beta of 0.01, meaning that its stock price is 99% less volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ESS Tech | 1 | 5 | 1 | 0 | 2.00 |
| Sigma Lithium | 1 | 2 | 0 | 0 | 1.67 |
ESS Tech presently has a consensus target price of $2.88, indicating a potential upside of 32.79%. Sigma Lithium has a consensus target price of $7.00, indicating a potential downside of 25.77%. Given ESS Tech’s stronger consensus rating and higher probable upside, equities analysts clearly believe ESS Tech is more favorable than Sigma Lithium.
Institutional & Insider Ownership
46.8% of ESS Tech shares are held by institutional investors. Comparatively, 64.9% of Sigma Lithium shares are held by institutional investors. 1.7% of ESS Tech shares are held by insiders. Comparatively, 48.6% of Sigma Lithium shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares ESS Tech and Sigma Lithium”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ESS Tech | $6.30 million | 6.74 | -$86.22 million | ($5.10) | -0.42 |
| Sigma Lithium | $152.36 million | 6.89 | -$51.07 million | ($0.31) | -30.42 |
Sigma Lithium has higher revenue and earnings than ESS Tech. Sigma Lithium is trading at a lower price-to-earnings ratio than ESS Tech, indicating that it is currently the more affordable of the two stocks.
Summary
Sigma Lithium beats ESS Tech on 9 of the 14 factors compared between the two stocks.
About ESS Tech
ESS Tech, Inc., an energy storage company, designs and produces iron flow batteries for commercial and utility-scale energy storage applications worldwide. It offers energy storage products, which include Energy Warehouse, a behind-the-meter solution; and Energy Center, a front-of-the-meter solution. The company was founded in 2011 and is headquartered in Wilsonville, Oregon.
About Sigma Lithium
Sigma Lithium Corporation engages in the exploration and development of lithium deposits in Brazil. It holds a 100% interest in the Grota do Cirilo, Genipapo, Santa Clara, and São José properties comprising 29 mineral rights covering an area of approximately 185 square kilometers located in the Araçuaí and Itinga regions of the state of Minas Gerais, Brazil. It serves electric vehicle industries worldwide. The company was formerly known as Sigma Lithium Resources Corporation and changed its name to Sigma Lithium Corporation in July 2021. The company is headquartered in São Paulo, Brazil.
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