FuelCell Energy (NASDAQ: FCEL) and Renesola (NYSE:SOL) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

FuelCell Energy has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500. Comparatively, Renesola has a beta of 2.24, indicating that its stock price is 124% more volatile than the S&P 500.

Profitability

This table compares FuelCell Energy and Renesola’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FuelCell Energy -60.75% -44.42% -14.99%
Renesola -7.71% -81.60% -5.36%

Valuation & Earnings

This table compares FuelCell Energy and Renesola’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FuelCell Energy $83.61 million 1.05 -$36.29 million ($1.51) -0.98
Renesola $825.75 million 0.06 $41.45 million ($3.17) -0.78

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for FuelCell Energy and Renesola, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FuelCell Energy 0 3 1 0 2.25
Renesola 1 1 0 0 1.50

FuelCell Energy currently has a consensus price target of $2.00, indicating a potential upside of 35.14%. Renesola has a consensus price target of $3.00, indicating a potential upside of 21.95%. Given FuelCell Energy’s stronger consensus rating and higher probable upside, research analysts clearly believe FuelCell Energy is more favorable than Renesola.

Insider & Institutional Ownership

14.4% of FuelCell Energy shares are held by institutional investors. Comparatively, 14.5% of Renesola shares are held by institutional investors. 1.7% of FuelCell Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

FuelCell Energy beats Renesola on 7 of the 13 factors compared between the two stocks.

FuelCell Energy Company Profile

Fuelcell Energy, Inc. delivers fuel cell power solutions. The Company is engaged in designing, manufacturing, installing, operating and maintaining fuel cell power solutions. The Company also provides turnkey power generation solutions to the customers, including power plant installation, operations and maintenance. The Company’s segment is fuel cell power plant production and research. The Company offers its services to various sectors, including utility companies, municipalities, universities, government entities and a range of industrial and commercial enterprises. The Company, by utilizing its Direct FuelCell (DFC) plants, is commercializing a tri-generation distributed hydrogen configuration that generates electricity, heat and hydrogen for industrial and/or transportation uses, as well as a fuel cell carbon capture solution for coal or gas-fired power plants. The Company is also developing and commercializing solid oxide fuel cell (SOFC) plants for sub-megawatt applications.

Renesola Company Profile

ReneSola Ltd is a holding company. The Company is a brand and technology provider of energy-efficient products based in China. The Company’s segments include wafer sales, cell and module sales, and solar power projects. The wafer sales segment involves the manufacture and sales of monocrystalline and multicrystalline solar wafers and processing services. The cell and module sales segment involves the manufacture and sales of solar cells and modules. The solar power projects segment involves sales of solar power projects and electricity generation revenue of certain project assets it owns and operates. The Company provides its customers with solar power products and processing services. It provides solar power products to a network of suppliers and customers, which includes manufacturers of solar cells and modules and distributors, installers and end users of solar modules. The Company manufactures solar-grade polysilicon, solar wafers, cells and modules.

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