Sunworks (NASDAQ: SUNW) and Canadian Solar (NASDAQ:CSIQ) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Earnings & Valuation

This table compares Sunworks and Canadian Solar’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sunworks $75.36 million 0.47 -$10.04 million ($0.57) -2.75
Canadian Solar $2.70 billion 0.33 $150.16 million $0.44 34.96

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

Institutional and Insider Ownership

6.2% of Sunworks shares are held by institutional investors. Comparatively, 41.3% of Canadian Solar shares are held by institutional investors. 5.6% of Sunworks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Sunworks and Canadian Solar, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunworks 0 2 1 0 2.33
Canadian Solar 1 6 3 0 2.20

Sunworks currently has a consensus target price of $2.75, suggesting a potential upside of 75.16%. Canadian Solar has a consensus target price of $17.38, suggesting a potential upside of 12.97%. Given Sunworks’ stronger consensus rating and higher probable upside, equities analysts clearly believe Sunworks is more favorable than Canadian Solar.

Risk and Volatility

Sunworks has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500. Comparatively, Canadian Solar has a beta of 3.09, indicating that its share price is 209% more volatile than the S&P 500.

Profitability

This table compares Sunworks and Canadian Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunworks -15.37% -54.69% -27.35%
Canadian Solar 1.01% 1.71% 0.29%

Summary

Canadian Solar beats Sunworks on 9 of the 13 factors compared between the two stocks.

About Sunworks

Sunworks, Inc., formerly Solar3D, Inc., provides photo voltaic (PV) based power systems for the residential, commercial and agricultural markets in California and Nevada. The Company, through its operating subsidiaries, designs, arranges financing, integrates, installs and manages systems ranging in size from 2 kilowatt (KW) for residential loads to multi megawatts (MW) systems for larger commercial projects. The Company’s commercial installations include office buildings, manufacturing plants, warehouses and agricultural facilities, such as farms, wineries and dairies. The Company provides a range of installation services to its solar energy customers, including design, system engineering, procurement, permitting, construction, grid connection, warranty, system monitoring and maintenance. The Company has installed over 850 systems in California and Nevada.

About Canadian Solar

Canadian Solar Inc. is a solar power company. The Company is a provider of solar power products, services and system solutions with operations in North America, South America, Europe, Africa, the Middle East, Australia and Asia. Its segments include module segment, energy development segment and electricity generation segment. It designs, develops and manufactures solar wafers, solar cells and solar power products. The module segment primarily involves the design, development, manufacturing and sale of a range of solar power products, including standard solar modules and specialty solar products, and solar system kits. Its energy development segment consists of solar power project development, engineering, procurement and construction services, and operation and maintenance services. Its electricity generation segment consists of holding solar power projects for the purpose of generating income from the sale of electricity to the local or national grid or other power purchasers.

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