8point3 Energy Partners (NASDAQ: CAFD) and Vivint Solar (NYSE:VSLR) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Profitability

This table compares 8point3 Energy Partners and Vivint Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
8point3 Energy Partners 23.87% 1.94% 1.11%
Vivint Solar 26.35% -26.46% -8.14%

Dividends

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for 8point3 Energy Partners and Vivint Solar, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
8point3 Energy Partners 2 9 3 0 2.07
Vivint Solar 1 3 1 0 2.00

8point3 Energy Partners currently has a consensus price target of $15.54, suggesting a potential upside of 6.01%. Vivint Solar has a consensus price target of $4.50, suggesting a potential downside of 6.25%. Given 8point3 Energy Partners’ stronger consensus rating and higher possible upside, research analysts plainly believe 8point3 Energy Partners is more favorable than Vivint Solar.

Risk & Volatility

8point3 Energy Partners has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Vivint Solar has a beta of -0.23, meaning that its stock price is 123% less volatile than the S&P 500.

Earnings & Valuation

This table compares 8point3 Energy Partners and Vivint Solar’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
8point3 Energy Partners $67.15 million 6.13 $51.64 million N/A N/A
Vivint Solar $209.14 million 2.63 -$60.84 million $0.48 10.00

8point3 Energy Partners has higher revenue, but lower earnings than Vivint Solar.

Institutional and Insider Ownership

56.3% of 8point3 Energy Partners shares are owned by institutional investors. Comparatively, 95.2% of Vivint Solar shares are owned by institutional investors. 4.5% of Vivint Solar shares are owned by company 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

8point3 Energy Partners beats Vivint Solar on 9 of the 13 factors compared between the two stocks.

About 8point3 Energy Partners

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.

About Vivint Solar

Vivint Solar, Inc. offers distributed solar energy, electricity generated by a solar energy system installed at or near customers’ locations, to residential customers. Through investment funds, the Company owns solar energy systems it installs and provides solar electricity pursuant to long-term contracts with its customers. The Company also sells solar energy systems outright to customers. The Company deploys its direct-to-home sales force to provide in-person professional consultations to prospective customers to evaluate the feasibility of installing a solar energy system at their residence. The Company’s systems use communication gateways and monitoring services to collect performance data. The Company operates in Arizona, California, Connecticut, Florida, Hawaii, Maryland, Massachusetts, New Jersey, New Mexico, New York, Pennsylvania, South Carolina, Texas and Utah. The Company purchases solar panels directly from multiple manufacturers.

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