Comparing Epsilon Energy (NASDAQ:EPSN) and Alto Ingredients (NASDAQ:ALTO)

Alto Ingredients (NASDAQ:ALTO) and Epsilon Energy (NASDAQ:EPSN) are both small-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Earnings & Valuation

This table compares Alto Ingredients and Epsilon Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alto Ingredients	$917.93 million	0.32	$13.34 million	$0.67	5.63
Epsilon Energy	$51.59 million	3.37	-$5.80 million	($0.21)	-27.33

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Alto Ingredients and Epsilon Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alto Ingredients	0	2	1	1	2.75
Epsilon Energy	0	1	0	0	2.00

Alto Ingredients currently has a consensus target price of $10.00, indicating a potential upside of 165.25%. Given Alto Ingredients’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Alto Ingredients is more favorable than Epsilon Energy.

Institutional & Insider Ownership

42.4% of Alto Ingredients shares are owned by institutional investors. Comparatively, 60.3% of Epsilon Energy shares are owned by institutional investors. 4.3% of Alto Ingredients shares are owned by insiders. Comparatively, 28.4% of Epsilon Energy shares are owned 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.

Profitability

This table compares Alto Ingredients and Epsilon Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alto Ingredients	5.51%	18.54%	11.61%
Epsilon Energy	-3.77%	5.56%	3.26%

Risk and Volatility

Alto Ingredients has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500. Comparatively, Epsilon Energy has a beta of -0.06, meaning that its share price is 106% less volatile than the S&P 500.

Summary

Alto Ingredients beats Epsilon Energy on 12 of the 15 factors compared between the two stocks.

About Alto Ingredients

Alto Ingredients, Inc. produces, distributes, and markets specialty alcohols, renewable fuel, and essential ingredients in the United States. The company operates in three segments: Marketing and Distribution, Pekin Campus Production, and Western Production. It offers specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants, and cleaners for health, home, and beauty markets; grain neutral spirits used in alcoholic beverages and vinegar, as well as corn germ used in corn oils in the food and beverage markets; alcohols and other products for paint applications and fertilizers in the industrial and agriculture markets; and essential ingredients include dried yeast, corn protein meal, corn protein feed, distiller's grains, and liquid feed for commercial animal feed and pet food applications, as well as yeast for human consumption. The company also provides fuel-grade ethanol used as transportation fuel and distillers corn oil used as a biodiesel feedstock, as well as fuel-grade ethanol produced by third parties. In addition, it offers transportation, storage, and delivery services through third-party service providers. The company sells ethanol to integrated oil companies and gasoline marketers; essential ingredient feed products to dairies and feedlots; and corn oil to poultry, renewable diesel, and biodiesel customers. It operates alcohol production facilities. The company was formerly known as Pacific Ethanol, Inc. and changed its name to Alto Ingredients, Inc. in January 2021. Alto Ingredients, Inc. was founded in 2003 and is headquartered in Pekin, Illinois.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.