Azure Power Global (NYSE: AZRE) and 8point3 Energy Partners (NASDAQ:CAFD) are both small-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their profitabiliy, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Dividends

8point3 Energy Partners pays an annual dividend of $1.06 per share and has a dividend yield of 7.2%. Azure Power Global does not pay a dividend.

Insider & Institutional Ownership

45.3% of Azure Power Global shares are owned by institutional investors. Comparatively, 55.7% of 8point3 Energy Partners shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Azure Power Global and 8point3 Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Azure Power Global -23.28% -9.97% -2.29%
8point3 Energy Partners 23.87% 1.94% 1.11%

Valuation and Earnings

This table compares Azure Power Global and 8point3 Energy Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Azure Power Global $64.54 million 6.83 $46.28 million ($5.48) -3.10
8point3 Energy Partners N/A N/A N/A N/A N/A

Azure Power Global has higher revenue and earnings than 8point3 Energy Partners.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Azure Power Global and 8point3 Energy Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Azure Power Global 0 0 3 0 3.00
8point3 Energy Partners 2 9 3 0 2.07

Azure Power Global presently has a consensus target price of $22.00, indicating a potential upside of 29.41%. 8point3 Energy Partners has a consensus target price of $15.54, indicating a potential upside of 6.09%. Given Azure Power Global’s stronger consensus rating and higher probable upside, analysts plainly believe Azure Power Global is more favorable than 8point3 Energy Partners.

Summary

8point3 Energy Partners beats Azure Power Global on 5 of the 8 factors compared between the two stocks.

Azure Power Global Company Profile

Azure Power Global Limited is an India-based power producer. The Company sells solar power in India on long term fixed price contracts to its customers. The Company is also developing micro-grid applications for the highly fragmented and underserved electricity market in India. The Company operates approximately 20 utility scale projects and several commercial rooftop projects with a combined rated capacity of approximately 240 megawatts. The Company’s services include design, engineering and construction of grid integrated solar installations; off grid solar installations for villages, hamlets and remote areas; turnkey solar installations for commercial and residential complexes on roof tops, as back up and alternate source, and operation and maintenance of solar installations. The Company’s projects include Project Punjab, Rajasthan Projects, Gandhinagar Smart City Rooftop Project and Micro-Grids in Bihar and Uttar Pradesh.

8point3 Energy Partners Company Profile

8point3 Energy Partners LP owns, operates and acquires solar energy generation projects. As of November 30, 2016, Company’s portfolio comprised interests in 642 Megawatt (MW) of solar energy projects. The Company is developing projects under utility, commercial and industrial (C&I) and residential categories. As of November 30, 2016, the Company owned interests in nine utility-scale solar energy projects; four C&I solar energy projects, and a portfolio of residential Distributed generation (DG) Solar assets. The Company’s utility project portfolio comprises projects, which include Maryland Solar, Solar Gen 2, Lost Hills Blackwell, North Star, RPU, Quinto, Hooper and Kingbird. The Company’s C&I projects comprise UC Davis, Macy’s California, Macy’s Maryland and Kern. The Company’s residential portfolio targets homeowners in the United States.

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