First Solar (NASDAQ: FSLR) and Sunworks (NASDAQ:SUNW) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Analyst Recommendations

This is a summary of recent recommendations for First Solar and Sunworks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Solar 1 15 8 0 2.29
Sunworks 0 2 1 0 2.33

First Solar currently has a consensus price target of $44.85, indicating a potential downside of 6.75%. Sunworks has a consensus price target of $2.75, indicating a potential upside of 77.42%. Given Sunworks’ stronger consensus rating and higher possible upside, analysts plainly believe Sunworks is more favorable than First Solar.

Profitability

This table compares First Solar and Sunworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Solar -18.80% 6.43% 4.94%
Sunworks -15.37% -54.69% -27.35%

Insider and Institutional Ownership

53.6% of First Solar shares are owned by institutional investors. Comparatively, 6.2% of Sunworks shares are owned by institutional investors. 0.6% of First Solar shares are owned by insiders. Comparatively, 5.6% of Sunworks shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares First Solar and Sunworks’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Solar $2.57 billion 1.95 $296.64 million ($4.84) -9.94
Sunworks $75.36 million 0.46 -$10.04 million ($0.57) -2.72

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

Volatility and Risk

First Solar has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500. Comparatively, Sunworks has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500.

Summary

First Solar beats Sunworks on 8 of the 13 factors compared between the two stocks.

About First Solar

First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company’s solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.

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.

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