REX American Resources Corporation (NYSE: REX) and Ability (NASDAQ:ABIL) are both small-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitabiliy and earnings.

Institutional & Insider Ownership

90.3% of REX American Resources Corporation shares are owned by institutional investors. Comparatively, 6.2% of Ability shares are owned by institutional investors. 12.2% of REX American Resources Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

REX American Resources Corporation has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500. Comparatively, Ability has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
REX American Resources Corporation 7.29% 8.96% 7.70%
Ability -48.78% -48.56% -17.69%

Valuation & Earnings

This table compares REX American Resources Corporation and Ability’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
REX American Resources Corporation $466.72 million 1.36 $71.98 million $5.17 18.72
Ability $16.51 million 2.00 -$4.64 million ($0.34) -3.76

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

Analyst Ratings

This is a summary of current ratings for REX American Resources Corporation and Ability, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
REX American Resources Corporation 0 1 0 0 2.00
Ability 0 1 0 0 2.00

REX American Resources Corporation currently has a consensus price target of $94.50, indicating a potential downside of 2.38%. Ability has a consensus price target of $1.30, indicating a potential upside of 1.56%. Given Ability’s higher possible upside, analysts plainly believe Ability is more favorable than REX American Resources Corporation.

Summary

REX American Resources Corporation beats Ability on 9 of the 11 factors compared between the two stocks.

REX American Resources Corporation Company Profile

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.

Ability Company Profile

Ability Inc. is a holding company. The Company operates through its subsidiaries, Ability Computer & Software Industries Ltd. and Ability Security Systems Ltd., which provide interception, geolocation and cyber intelligence tools for security and intelligence agencies, military forces, law enforcement agencies and homeland security agencies around the world. The Company is engaged in off-air interception of voice, short message service (SMS), and data communication from both cellular and satellite communication networks, and deciphering solutions for both cellular and satellite communications. The Company’s product categories include Cellular Interception, Cellular Counter Interception, Satellite Interception, Geolocation, Cyber and Crime Prevention. Its Cellular Interception systems include Ultimate Interceptor (ULIN), IBIS, TouchDown, ACIS, AGIS-51 and 3G-Cat. Its Satellite Interception systems include IRIS, ATIS and SLIS.

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