Critical Analysis: Babcock (NYSE:BW) and Bloom Energy (NYSE:BE)

Babcock (NYSE:BW) and Bloom Energy (NYSE:BE) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Valuation and Earnings

This table compares Babcock and Bloom Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Babcock	$834.35 million	1.01	-$36.16 million	($0.18)	-31.33
Bloom Energy	$3.11 billion	27.14	-$88.43 million	$0.75	382.50

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

Volatility & Risk

Babcock has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Bloom Energy has a beta of 3.77, meaning that its share price is 277% more volatile than the S&P 500.

Institutional and Insider Ownership

83.2% of Babcock shares are held by institutional investors. Comparatively, 77.0% of Bloom Energy shares are held by institutional investors. 2.8% of Babcock shares are held by insiders. Comparatively, 3.0% of Bloom Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Babcock and Bloom Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Babcock	1	2	4	0	2.43
Bloom Energy	1	13	10	2	2.50

Babcock presently has a consensus price target of $15.40, indicating a potential upside of 173.05%. Bloom Energy has a consensus price target of $257.18, indicating a potential downside of 10.35%. Given Babcock’s higher probable upside, equities analysts clearly believe Babcock is more favorable than Bloom Energy.

Profitability

This table compares Babcock and Bloom Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Babcock	-2.17%	-4.51%	0.70%
Bloom Energy	7.87%	35.45%	8.30%

Summary

Bloom Energy beats Babcock on 12 of the 15 factors compared between the two stocks.

About Babcock

Babcock & Wilcox Enterprises, Inc. engages in the provision of fossil and renewable power generation and environmental equipment. It operates through the following segments: B&W Renewable, B&W Environmental, and B&W Thermal. The B&W Renewable segment supports a circular economy, diverting waste from landfills to use for power generation and replacing fossil fuels, while recovering metals and reducing emissions. The B&W Environmental segment focuses on systems for cooling, ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control, and mercury control. The B&W Thermal segment offers steam generation equipment, aftermarket parts, construction, maintenance, and field services for plants in the power generation, oil and gas, and industrial sectors. The company was founded by George H. Babcock, Stephen Wilcox, Jr., and Joseph P. Manton in 1856 and is headquartered in Akron, OH.

About Bloom Energy

Bloom Energy Corporation designs, manufactures, sells, and installs solid-oxide fuel cell systems for on-site power generation in the United States and internationally. The company offers Bloom Energy Server, a solid oxide technology that converts fuel, such as natural gas, biogas, hydrogen, or a blend of these fuels into electricity through an electrochemical process without combustion. It sells its products through direct and indirect sales channels to utilities, data centers, agriculture, retail, hospitals, higher education, biotech, and manufacturing industries. The company was formerly known as Ion America Corp. and changed its name to Bloom Energy Corporation in 2006. Bloom Energy Corporation was incorporated in 2001 and is headquartered in San Jose, California.