Sunworks (NASDAQ: SUNW) and Sunrun (NASDAQ:RUN) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Risk and Volatility

Sunworks has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, Sunrun has a beta of -0.68, meaning that its share price is 168% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Sunworks and Sunrun, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunworks 0 1 2 0 2.67
Sunrun 0 0 4 0 3.00

Sunworks currently has a consensus target price of $2.67, indicating a potential upside of 161.44%. Sunrun has a consensus target price of $9.00, indicating a potential upside of 52.03%. Given Sunworks’ higher probable upside, equities research analysts clearly believe Sunworks is more favorable than Sunrun.

Insider and Institutional Ownership

6.2% of Sunworks shares are held by institutional investors. Comparatively, 75.1% of Sunrun shares are held by institutional investors. 17.4% of Sunworks shares are held by insiders. Comparatively, 24.1% of Sunrun shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Sunworks and Sunrun’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunworks -9.73% -37.92% -18.24%
Sunrun 18.79% 9.25% 2.69%

Valuation and Earnings

This table compares Sunworks and Sunrun’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Sunworks $86.42 million 0.27 -$9.38 million ($0.37) -2.76
Sunrun $453.90 million 1.39 $91.68 million $0.87 6.80

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

Summary

Sunrun beats Sunworks on 11 of the 13 factors compared between the two stocks.

Sunworks Company Profile

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.

Sunrun Company Profile

Sunrun Inc. is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (Projects) in the United States. The Company is engaged in providing solar energy services and products to its customers. As of December 31, 2016, it operated a fleet of residential solar energy systems in the United States, with approximately 134,000 customers across 16 states, as well as the District of Columbia. The Company sells to homeowners over the phone, in the field through canvassing and in-home sales and through retail sales channels through its strategic partners. The solar service offerings are provided through its lease and power purchase agreements. It sells solar service offerings and installs solar energy systems for homeowners through its direct-to-consumer channel. It sells solar energy systems to homeowners, as well as related products, such as solar panels, inverters, racking systems and other solar-related equipment to resellers.

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