TerraForm Global (NASDAQ: GLBL) and TerraForm Power (NASDAQ:TERP) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Valuation & Earnings

This table compares TerraForm Global and TerraForm Power’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TerraForm Global $229.19 million 2.49 $95.66 million ($0.55) -9.18
TerraForm Power $654.56 million 2.63 $450.13 million ($1.83) -7.54

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

Profitability

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

Net Margins Return on Equity Return on Assets
TerraForm Global -26.87% -6.15% -2.90%
TerraForm Power -19.84% -4.59% -1.62%

Insider & Institutional Ownership

76.8% of TerraForm Global shares are owned by institutional investors. Comparatively, 80.9% of TerraForm Power shares are owned by institutional investors. 0.5% of TerraForm Global shares are owned by company insiders. Comparatively, 34.6% of TerraForm Power shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

TerraForm Global has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, TerraForm Power has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for TerraForm Global and TerraForm Power, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TerraForm Global 0 1 1 0 2.50
TerraForm Power 0 3 1 0 2.25

TerraForm Global currently has a consensus price target of $5.00, suggesting a potential downside of 0.99%. TerraForm Power has a consensus price target of $13.00, suggesting a potential downside of 5.73%. Given TerraForm Global’s stronger consensus rating and higher possible upside, research analysts plainly believe TerraForm Global is more favorable than TerraForm Power.

Summary

TerraForm Power beats TerraForm Global on 9 of the 12 factors compared between the two stocks.

TerraForm Global Company Profile

TerraForm Global, Inc. is a holding company. The Company is a diversified renewable energy company that owns contracted solar and wind power plants. The Company operates through two segments: Solar Energy and Wind Energy. The segments include the Company’s entire portfolio of power plants. The Company’s portfolio consisted of solar and wind power plants located in Brazil, China, India, Malaysia, South Africa, Thailand and Uruguay with an aggregate net capacity of 916.4 megawatts (MW) as of October 31, 2016. The Company’s solar and wind power plants include Salvador, Bahia, Dunhuang, Honiton, NSM 24, Focal, NSM Suryalabh, NSM Sitara, NSM L’Volta, Millenium, Brakes, Raj 5, ESP Urja, Azure, Hanumanhatti, Gadag, Bhakrani, Silverstar Pavilion, Fortune 11, Corporate Season, Boshof, Witkop, Soutpan and PP Solar.

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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