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

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.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Enviva Partners, $479.15 million 1.57 $82.76 million $0.71 40.14
Renewable Energy Group $2.16 billion 0.22 $95.97 million $0.85 14.76

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.

Profitability

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

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

Volatility and Risk

Enviva Partners, has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Renewable Energy Group has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Enviva Partners, and Renewable Energy Group, as provided by MarketBeat.

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

Enviva Partners, presently has a consensus price target of $29.00, indicating a potential upside of 1.75%. Renewable Energy Group has a consensus price target of $14.00, indicating a potential upside of 11.55%. Given Renewable Energy Group’s stronger consensus rating and higher probable upside, analysts plainly believe Renewable Energy Group is more favorable than Enviva Partners,.

Insider and Institutional Ownership

97.2% of Renewable Energy Group shares are held by institutional investors. 2.3% of Renewable Energy Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

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

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.

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.

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