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

Dividends

8point3 Energy Partners pays an annual dividend of $1.06 per share and has a dividend yield of 7.3%. Vivint Solar does not pay a dividend.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
8point3 Energy Partners N/A N/A N/A N/A N/A
Vivint Solar $209.14 million 2.57 -$60.84 million $0.48 9.79

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

Volatility and Risk

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 -0.25, meaning that its stock price is 125% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings 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 6.45%. Vivint Solar has a consensus price target of $5.40, suggesting a potential upside of 14.89%. Given Vivint Solar’s higher probable upside, analysts clearly believe Vivint Solar is more favorable than 8point3 Energy Partners.

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%

Insider & Institutional 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, endowments and large money managers believe a company will outperform the market over the long term.

Summary

8point3 Energy Partners beats Vivint Solar on 6 of the 11 factors compared between the two stocks.

8point3 Energy Partners Company Profile

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.

Vivint Solar Company Profile

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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