Critical Analysis: Aspen Aerogels (NYSE:ASPN) versus Obayashi (OTCMKTS:OBYCF)

Aspen Aerogels (NYSE:ASPN) and Obayashi (OTCMKTS:OBYCF) are both construction companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for Aspen Aerogels and Obayashi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aspen Aerogels	2	1	3	0	2.17
Obayashi	0	0	0	0	0.00

Aspen Aerogels presently has a consensus price target of $5.19, indicating a potential downside of 12.15%. Given Aspen Aerogels’ stronger consensus rating and higher possible upside, research analysts clearly believe Aspen Aerogels is more favorable than Obayashi.

Volatility and Risk

Aspen Aerogels has a beta of 3.02, meaning that its share price is 202% more volatile than the S&P 500. Comparatively, Obayashi has a beta of 0.16, meaning that its share price is 84% less volatile than the S&P 500.

Institutional and Insider Ownership

97.6% of Aspen Aerogels shares are held by institutional investors. 3.0% of Aspen Aerogels shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Aspen Aerogels and Obayashi”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aspen Aerogels	$271.10 million	1.81	-$389.55 million	($1.36)	-4.34
Obayashi	$17.18 billion	0.80	$1.15 billion	$1.67	11.59

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

Profitability

This table compares Aspen Aerogels and Obayashi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aspen Aerogels	-48.64%	-22.16%	-12.85%
Obayashi	6.70%	10.48%	4.28%

About Aspen Aerogels

Aspen Aerogels, Inc. designs, develops, manufactures, and sells aerogel insulation products primarily for use in the energy infrastructure and sustainable insulation materials markets in the United States, Asia, Canada, Europe, and Latin America. It operates in two segments, Energy Industrial and Thermal Barrier. The company offers PyroThin thermal barriers for use in lithium-ion batteries in electric vehicles and energy storage industries; Pyrogel XTE that reduces the risk of corrosion under insulation in energy infrastructure operating systems; and Pyrogel HPS for applications within the power generation market. It also offers Pyrogel XTF to provide protection against fire; Cryogel Z for sub-ambient and cryogenic applications in the energy infrastructure market; Spaceloft Subsea for use in pipe-in-pipe applications in offshore oil production; and Cryogel X201, which is used in designing cold systems, such as refrigerated appliances, cold storage equipment, and aerospace systems. The company was founded in 2001 and is headquartered in Northborough, Massachusetts.

About Obayashi

Obayashi Corporation engages in the construction business in Japan, North America, Asia, the Middle East, Europe, and Oceania. The company constructs buildings, including offices, condominiums, commercial facilities, factories, hospitals, and schools; and civil engineering projects, such as tunnels, bridges, dams, river works, urban civil engineering structures, railroads, and expressways. It is also involved in the development and leasing of real estate properties in various locations, primarily in urban areas, as well as property management activities; solar, biomass, geothermal, and wind power generation business; and PPP and agriculture business. In addition, the company provides non-life insurance agency business. Further, it engages in the provision of urban redevelopment, contracted operations, and facility management services, as well as M&E design and construction activities. The company was founded in 1892 and is headquartered in Tokyo, Japan.