Renewable Energy Group (NASDAQ: REGI) and Enviva Partners, (NYSE:EVA) are both small-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitabiliy, valuation, analyst recommendations and dividends.

Profitability

This table compares Renewable Energy Group and Enviva Partners,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Renewable Energy Group 1.58% 7.71% 4.20%
Enviva Partners, 4.13% 10.85% 5.30%

Dividends

Enviva Partners, pays an annual dividend of $2.22 per share and has a dividend yield of 7.8%. Renewable Energy Group does not pay a dividend. Enviva Partners, pays out 312.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

97.2% of Renewable Energy Group shares are held by institutional investors. 2.3% of Renewable Energy Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Renewable Energy Group and Enviva Partners,, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Renewable Energy Group 0 1 2 0 2.67
Enviva Partners, 0 2 2 0 2.50

Renewable Energy Group currently has a consensus target price of $14.00, indicating a potential upside of 14.29%. Enviva Partners, has a consensus target price of $28.75, indicating a potential upside of 1.23%. Given Renewable Energy Group’s stronger consensus rating and higher probable upside, analysts clearly believe Renewable Energy Group is more favorable than Enviva Partners,.

Volatility & Risk

Renewable Energy Group has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Enviva Partners, has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Valuation and Earnings

This table compares Renewable Energy Group and Enviva Partners,’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Renewable Energy Group $2.16 billion 0.22 $95.97 million $0.85 14.41
Enviva Partners, $479.15 million 1.56 $82.76 million $0.71 40.00

Renewable Energy Group has higher revenue and earnings than Enviva Partners,. Renewable Energy Group is trading at a lower price-to-earnings ratio than Enviva Partners,, indicating that it is currently the more affordable of the two stocks.

Summary

Renewable Energy Group beats Enviva Partners, on 9 of the 15 factors compared between the two stocks.

Renewable Energy Group Company Profile

Renewable Energy Group, Inc. is focused on providing cleaner, lower carbon intensity products and services. The Company is a producer of biomass-based diesel in North America. Its segments include Biomass-based diesel, Services, Renewable Chemicals and Corporate and other activities. It is involved in various activities related to biomass-based diesel production, from acquiring feedstock, managing construction and operating biomass-based diesel production facilities to marketing, selling and distributing biomass-based diesel and its co-products. As of December 31, 2016, it owned and operated a network of 14 biorefineries. As of December 31, 2016, 12 biorefineries were located in the United States and two in Germany, and 13 of which produce biodiesel or renewable hydrocarbon diesel and had an aggregate nameplate production capacity of 502 million gallons per year (mmgy). As of December 31, 2016, it also operated one microbial fermentation facility and one feedstock processing facility.

Enviva Partners, Company Profile

Enviva Partners, LP is a supplier of utility-grade wood pellets to power generators. The Company procures wood fiber and processes it into utility-grade wood pellets and loads the finished wood pellets into railcars, trucks and barges that are transported to deep-water marine terminals, where they are received, stored and loaded onto oceangoing vessels for transport to the Company’s principally Northern European customers. The Company’s principal product, utility-grade wood pellets, is a traded energy commodity that is used as a substitute for coal in both dedicated and co-fired power generation and combined heat and power plants. It enables power generators to generate electricity. The Company’s customers use its wood pellets as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Wood pellets are exported from the Company’s deep-water marine terminal in Chesapeake, Virginia, from a deep-water marine terminal in Wilmington, North Carolina.

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