Critical Review: Real Goods Solar (RGSE) versus Masonite International Corporation (DOOR)

Real Goods Solar (NASDAQ: RGSE) and Masonite International Corporation (NYSE:DOOR) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitabiliy, institutional ownership, risk and valuation.

Volatility & Risk

Real Goods Solar has a beta of 2.03, meaning that its stock price is 103% more volatile than the S&P 500. Comparatively, Masonite International Corporation has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Valuation and Earnings

This table compares Real Goods Solar and Masonite International Corporation’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Real Goods Solar	$16.14 million	0.42	-$10.95 million	($496.98)	0.00
Masonite International Corporation	$1.97 billion	1.16	$224.26 million	$3.36	22.83

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

Profitability

This table compares Real Goods Solar and Masonite International Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Real Goods Solar	-159.31%	-575.03%	-85.04%
Masonite International Corporation	5.29%	14.73%	6.72%

Institutional & Insider Ownership

6.0% of Real Goods Solar shares are held by institutional investors. Comparatively, 98.0% of Masonite International Corporation shares are held by institutional investors. 0.2% of Real Goods Solar shares are held by company insiders. Comparatively, 2.2% of Masonite International Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Real Goods Solar and Masonite International Corporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Real Goods Solar	0	0	0	0	N/A
Masonite International Corporation	0	0	8	0	3.00

Masonite International Corporation has a consensus target price of $78.63, indicating a potential upside of 2.51%. Given Masonite International Corporation’s higher possible upside, analysts clearly believe Masonite International Corporation is more favorable than Real Goods Solar.

Summary

Masonite International Corporation beats Real Goods Solar on 11 of the 12 factors compared between the two stocks.

Real Goods Solar Company Profile

Real Goods Solar, Inc. is a residential and commercial solar energy engineering, procurement, and construction company. The Company offers turnkey services, including design, procurement, permitting, build-out, grid connection, financing referrals and warranty and customer satisfaction activities. Its solar energy systems use solar photovoltaic (PV) modules. The Company operates in three segments: Residential – the installation of solar systems for homeowners, including lease financing thereof, and for small businesses (small commercial) in the continental United States; Sunetric – the installation of solar systems for both homeowners and small business owners (small commercial) in Hawaii, and Other – retail store and corporate operations.

Masonite International Corporation Company Profile

Masonite International Corporation is designer and manufacturer of interior and exterior doors for the residential new construction; the residential repair, renovation and remodeling, and the non-residential building construction markets. The Company principally operates in North America; Europe, Asia and Latin America, and Africa. The Company markets and sells its products to remodeling contractors, builders, homeowners, retailers, dealers, lumberyards, commercial and general contractors and architects through wholesale and retail distribution channels. Its portfolio of brands includes Masonite, Marshfield, Premdor, Mohawk, Megantic, Algoma, Baillargeon, Birchwood Best and Lemieux. In February 2014, Masonite International Corporation completed the acquisition of Door-Stop International Limited.