Critical Comparison: First Solar (FSLR) & DAQO New Energy Corp. (NYSE:DQ)
First Solar (NASDAQ: FSLR) and DAQO New Energy Corp. (NYSE:DQ) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, dividends, profitabiliy, valuation, analyst recommendations and institutional ownership.
Earnings and Valuation
This table compares First Solar and DAQO New Energy Corp.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|First Solar||$2.57 billion||1.95||$296.64 million||($4.84)||-9.91|
|DAQO New Energy Corp.||$255.23 million||1.14||$121.90 million||$5.45||5.06|
First Solar has higher revenue and earnings than DAQO New Energy Corp.. First Solar is trading at a lower price-to-earnings ratio than DAQO New Energy Corp., indicating that it is currently the more affordable of the two stocks.
This table compares First Solar and DAQO New Energy Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|DAQO New Energy Corp.||22.75%||22.97%||9.54%|
Risk and Volatility
First Solar has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500. Comparatively, DAQO New Energy Corp. has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.
This is a summary of current recommendations for First Solar and DAQO New Energy Corp., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|DAQO New Energy Corp.||0||0||2||0||3.00|
First Solar presently has a consensus price target of $43.70, indicating a potential downside of 8.92%. DAQO New Energy Corp. has a consensus price target of $37.50, indicating a potential upside of 35.87%. Given DAQO New Energy Corp.’s stronger consensus rating and higher possible upside, analysts plainly believe DAQO New Energy Corp. is more favorable than First Solar.
Insider and Institutional Ownership
60.7% of First Solar shares are held by institutional investors. Comparatively, 30.3% of DAQO New Energy Corp. shares are held by institutional investors. 0.4% of First Solar shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
First Solar beats DAQO New Energy Corp. on 7 of the 13 factors compared between the two stocks.
About First Solar
First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company’s solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.
About DAQO New Energy Corp.
Daqo New Energy Corp. is a polysilicon manufacturer. The Company utilizes the chemical vapor deposition process, or the modified Siemens process, to produce polysilicon. The Company’s segments include Polysilicon and Wafer. The Company manufactures and sells polysilicon to photovoltaic product manufacturers, whereby the polysilicon is processed into ingots, wafers, cells and modules for solar power solutions. The Company offers ready-to-use polysilicon, packaged to meet crucible stacking, pulling and solidification needs. The Company offers wafers through its downstream photovoltaic product manufacturing business. The Company also provides wafer original equipment manufacturer (OEM) service to external customers through tolling agreements by processing polysilicon to produce ingot and wafer. Its annual capacity for polysilicon is approximately 12,150 metric tons (MT) in Xinjiang. The Company’s wafer manufacturing annual capacity is approximately 90 million pieces.
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