Energy Focus (NASDAQ: EFOI) and LSI Industries (NASDAQ:LYTS) are both small-cap construction companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitabiliy and valuation.
Analyst Ratings
This is a summary of current recommendations for Energy Focus and LSI Industries, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Energy Focus | 0 | 2 | 2 | 0 | 2.50 |
| LSI Industries | 0 | 1 | 1 | 0 | 2.50 |
Energy Focus presently has a consensus price target of $6.88, indicating a potential upside of 271.62%. LSI Industries has a consensus price target of $9.50, indicating a potential upside of 49.61%. Given Energy Focus’ higher possible upside, research analysts plainly believe Energy Focus is more favorable than LSI Industries.
Risk and Volatility
Energy Focus has a beta of -0.23, indicating that its share price is 123% less volatile than the S&P 500. Comparatively, LSI Industries has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500.
Profitability
This table compares Energy Focus and LSI Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Energy Focus | -72.79% | -43.14% | -36.42% |
| LSI Industries | 1.13% | 3.77% | 2.83% |
Earnings and Valuation
This table compares Energy Focus and LSI Industries’ gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Energy Focus | $26.68 million | 0.82 | -$17.01 million | ($1.67) | -1.11 |
| LSI Industries | $328.82 million | 0.49 | $15.88 million | $0.15 | 42.34 |
LSI Industries has higher revenue and earnings than Energy Focus. Energy Focus is trading at a lower price-to-earnings ratio than LSI Industries, indicating that it is currently the more affordable of the two stocks.
Dividends
LSI Industries pays an annual dividend of $0.20 per share and has a dividend yield of 3.1%. Energy Focus does not pay a dividend. LSI Industries pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional & Insider Ownership
18.0% of Energy Focus shares are held by institutional investors. Comparatively, 76.5% of LSI Industries shares are held by institutional investors. 11.4% of Energy Focus shares are held by company insiders. Comparatively, 5.4% of LSI Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
LSI Industries beats Energy Focus on 9 of the 14 factors compared between the two stocks.
About Energy Focus
Energy Focus, Inc. along with its subsidiaries is engaged in the design, development, manufacturing, marketing, installation and sale of lighting systems. The Company is engaged in developing and selling of light-emitting diode (LED) lighting products for military maritime market, and general commercial and industrial markets. It produces, sources and/or markets a range of lighting technologies to serve its primary end markets. It offers military maritime products, such as Military Intellitube, military globe lights and military berth light to serve the United States navy and allied foreign navies. It offers commercial products, such as direct-wire tubular LED (TLED) replacements for linear fluorescent lamps, LED dock lights, low-bay and high-bay lighting for high-intensity discharge applications and LED retrofit kits to serve general commercial and industrial markets.
About LSI Industries
LSI Industries Inc. is a provider of corporate visual image solutions to the petroleum/convenience store industry. The Company designs and develops aspects of the solid-state light emitting diode (LED) lighting, from the electronic circuit board, to the software to drive and control the LEDs, to the structure of the LED product. It operates through three segments: Lighting, Graphics and Technology. The Lighting Segment manufactures and markets outdoor and indoor lighting and lighting controls for the commercial, industrial and multi-site retail markets, including the quick-service and automotive markets. The Graphics Segment manufactures and sells exterior and interior visual image elements related to signage and graphics, including integrated digital solutions. The Technology Segment designs, engineers, and manufactures electronic circuit boards, assemblies, lighting controls and large format solid state LED video displays. The Company provides a range of lighting control solutions.
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