Tecnoglass (NASDAQ: TGLS) and Real Goods Solar (NASDAQ:RGSE) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings for Tecnoglass and Real Goods Solar, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tecnoglass 0 1 1 0 2.50
Real Goods Solar 0 0 0 0 N/A

Tecnoglass currently has a consensus target price of $17.00, indicating a potential upside of 149.27%. Given Tecnoglass’ higher possible upside, research analysts clearly believe Tecnoglass is more favorable than Real Goods Solar.

Profitability

This table compares Tecnoglass and Real Goods Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tecnoglass -2.45% 16.94% 4.36%
Real Goods Solar -184.38% -233.16% -88.89%

Insider and Institutional Ownership

5.2% of Tecnoglass shares are owned by institutional investors. Comparatively, 5.1% of Real Goods Solar shares are owned by institutional investors. 67.2% of Tecnoglass shares are owned by company insiders. Comparatively, 0.2% of Real Goods Solar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Tecnoglass and Real Goods Solar’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tecnoglass $308.14 million 0.74 $57.67 million ($0.27) -25.26
Real Goods Solar $14.24 million 0.37 -$12.00 million ($334.75) 0.00

Tecnoglass has higher revenue and earnings than Real Goods Solar. Tecnoglass is trading at a lower price-to-earnings ratio than Real Goods Solar, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Tecnoglass has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, Real Goods Solar has a beta of 2.03, indicating that its stock price is 103% more volatile than the S&P 500.

Dividends

Tecnoglass pays an annual dividend of $0.13 per share and has a dividend yield of 1.9%. Real Goods Solar does not pay a dividend. Tecnoglass pays out -48.1% of its earnings in the form of a dividend.

Summary

Tecnoglass beats Real Goods Solar on 13 of the 14 factors compared between the two stocks.

About Real Goods Solar

Real Goods Solar, Inc. is a residential and commercial solar energy engineering, procurement, and construction company. The Company offers turnkey services, including design, procurement, permitting, build-out, grid connection, financing referrals and warranty and customer satisfaction activities. Its solar energy systems use solar photovoltaic (PV) modules. The Company operates in three segments: Residential – the installation of solar systems for homeowners, including lease financing thereof, and for small businesses (small commercial) in the continental United States; Sunetric – the installation of solar systems for both homeowners and small business owners (small commercial) in Hawaii, and Other – retail store and corporate operations.

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