Head to Head Survey: Vivint Solar (NYSE:VSLR) and Babcock & Wilcox (BW)

Vivint Solar (NYSE: VSLR) and Babcock & Wilcox (NYSE:BW) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Earnings & Valuation

This table compares Vivint Solar and Babcock & Wilcox’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vivint Solar $268.03 million 1.79 $209.09 million ($1.58) -2.63
Babcock & Wilcox $1.56 billion 0.08 -$379.82 million ($4.00) -0.67

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

Institutional and Insider Ownership

88.9% of Vivint Solar shares are held by institutional investors. Comparatively, 76.4% of Babcock & Wilcox shares are held by institutional investors. 4.2% of Vivint Solar shares are held by insiders. Comparatively, 3.6% of Babcock & Wilcox shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Vivint Solar and Babcock & Wilcox, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vivint Solar 0 2 2 0 2.50
Babcock & Wilcox 1 3 0 0 1.75

Vivint Solar currently has a consensus price target of $5.75, indicating a potential upside of 38.55%. Babcock & Wilcox has a consensus price target of $5.17, indicating a potential upside of 92.07%. Given Babcock & Wilcox’s higher possible upside, analysts plainly believe Babcock & Wilcox is more favorable than Vivint Solar.

Profitability

This table compares Vivint Solar and Babcock & Wilcox’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vivint Solar 64.57% -28.69% -8.11%
Babcock & Wilcox -33.38% -120.03% -20.73%

Volatility & Risk

Vivint Solar has a beta of -0.52, suggesting that its stock price is 152% less volatile than the S&P 500. Comparatively, Babcock & Wilcox has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500.

Summary

Vivint Solar beats Babcock & Wilcox on 10 of the 13 factors compared between the two stocks.

Vivint Solar Company Profile

Vivint Solar, Inc. provides distributed solar energy to residential, commercial, and industrial customers in the United States. The company operates in two segments, Residential, and Commercial and Industrial. It owns and installs solar energy systems through long-term customer contracts. The company also sells photovoltaic installation products, as well as solar renewable energy certificates. As of December 31, 2017, it had an aggregate capacity of 864.9 megawatts covering approximately 126,800 homes in 21 states. The company was formerly known as V Solar Holdings, Inc. and changed its name to Vivint Solar, Inc. in April 2014. Vivint Solar, Inc. was founded in 2011 and is headquartered in Lehi, Utah.

Babcock & Wilcox Company Profile

Babcock & Wilcox Enterprises, Inc. provides fossil and renewable power generation and environmental equipment for the power and industrial markets worldwide. Its Power segment offers boiler cleaning and material handling equipment; and supercritical, subcritical, fluidized bed, chemical recovery, industrial power, package, and waste heat boilers, as well as heat recovery steam generators. It also provides air pollution control products and related equipment, such as wet and dry flue gas desulfurization systems, catalytic and non-catalytic nitrogen oxides reduction systems, low nitrogen oxides burners and overfire air systems, fabric filter baghouses, wet and dry electrostatic precipitators, mercury control systems, and dry sorbent injection for acid gas mitigation. In addition, this segment also offers replacement parts, retrofit and upgrade projects, fuel switching and repowering projects, and training programs; and field technical, construction and maintenance, start-up and commissioning, and plant operations and maintenance services. The company's Renewable segment provides steam-generating systems; environmental and auxiliary equipment for the waste-to-energy and biomass power generation industries; and plant operations and maintenance services. Its Industrial segment offers oxidizers, solvent recovery and distillation systems, wet electrostatic precipitators, scrubbers, and heat recovery systems; and specialized industrial process systems, coating lines, and equipment. This segment also provides air-cooled (dry) cooling systems, mechanical draft wet cooling towers, and natural draft wet cooling hyperbolic towers; end-to-end aftermarket services, such as spare parts, upgrades and revamping of existing installations, and remote monitoring; and gas turbine inlet and exhaust systems, custom silencers, and filters and enclosures. The company was founded in 1867 and is headquartered in Charlotte, North Carolina.

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