SunPower Corporation (NASDAQ: SPWR) and SolarCity Corp (NASDAQ:SCTY) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitabiliy, valuation, institutional ownership and risk.
Risk and Volatility
SunPower Corporation has a beta of 3.07, meaning that its share price is 207% more volatile than the S&P 500. Comparatively, SolarCity Corp has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500.
Insider & Institutional Ownership
25.5% of SunPower Corporation shares are owned by institutional investors. Comparatively, 40.0% of SolarCity Corp shares are owned by institutional investors. 0.9% of SunPower Corporation shares are owned by insiders. Comparatively, 36.4% of SolarCity Corp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares SunPower Corporation and SolarCity Corp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SunPower Corporation | -20.21% | -10.47% | -2.56% |
| SolarCity Corp | -112.36% | 22.92% | -10.69% |
Analyst Recommendations
This is a summary of current ratings for SunPower Corporation and SolarCity Corp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SunPower Corporation | 1 | 14 | 3 | 0 | 2.11 |
| SolarCity Corp | 2 | 9 | 0 | 0 | 1.82 |
SunPower Corporation presently has a consensus target price of $9.30, suggesting a potential downside of 18.05%. SolarCity Corp has a consensus target price of $27.00, suggesting a potential upside of 32.74%. Given SolarCity Corp’s higher possible upside, analysts plainly believe SolarCity Corp is more favorable than SunPower Corporation.
Valuation & Earnings
This table compares SunPower Corporation and SolarCity Corp’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| SunPower Corporation | $2.57 billion | 0.62 | -$30.84 million | ($3.76) | -3.02 |
| SolarCity Corp | N/A | N/A | N/A | ($0.29) | -70.14 |
SolarCity Corp has higher revenue, but lower earnings than SunPower Corporation. SolarCity Corp is trading at a lower price-to-earnings ratio than SunPower Corporation, indicating that it is currently the more affordable of the two stocks.
Summary
SunPower Corporation beats SolarCity Corp on 6 of the 11 factors compared between the two stocks.
SunPower Corporation Company Profile
SunPower Corporation is a global energy company. The Company delivers complete solar solutions to residential, commercial, and power plant customers. The Company’s segments include Residential Segment, Commercial Segment and Power Plant Segment. The Residential and Commercial Segments combined are referred to as Distributed Generation. The Company offers solar module technology and solar power systems that are designed to generate electricity over a system life over 25 years; Integrated Smart Energy software solutions that enable customers to manage and optimize the cooperation center of excellence (CCOE) measurement; Installation, construction, and ongoing maintenance and monitoring services; and financing solutions that provide customers a range of options for purchasing or leasing solar products at competitive energy rates. The Company offers a set of residential solutions that deliver value to homeowners and its dealer partners.
SolarCity Corp Company Profile
SolarCity Corporation is a United States-based solar provider. The Company is primarily engaged in the design, manufacture, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. It operates through solar energy products and services segment. It integrates the sales, engineering, manufacturing, installation, monitoring, maintenance and financing of its distributed solar energy systems. It offers its customers the option to either purchase and own solar energy systems or to purchase the energy that its solar energy systems produce through various contractual arrangements. It installs solar energy system at its customer’s premises and charge the customer a monthly fee for the power that its system produces. Its products, services and technologies include solar energy systems, customer agreements, grid control/energy storage systems, Zep Solar mounting systems and software.
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