Sunrun (NASDAQ: RUN) and Ideal Power (NASDAQ:IPWR) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitabiliy, institutional ownership, risk and earnings.

Risk and Volatility

Sunrun has a beta of -0.6, meaning that its share price is 160% less volatile than the S&P 500. Comparatively, Ideal Power has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Valuation and Earnings

This table compares Sunrun and Ideal Power’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sunrun $459.27 million 1.32 -$83.86 million $0.86 6.67
Ideal Power $1.41 million 21.24 -$10.85 million ($1.14) -1.88

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

Profitability

This table compares Sunrun and Ideal Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunrun 19.88% 10.42% 2.73%
Ideal Power -798.79% -95.13% -81.98%

Analyst Recommendations

This is a breakdown of current ratings for Sunrun and Ideal Power, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunrun 0 2 6 0 2.75
Ideal Power 0 1 3 0 2.75

Sunrun presently has a consensus target price of $10.19, indicating a potential upside of 77.48%. Ideal Power has a consensus target price of $5.33, indicating a potential upside of 149.22%. Given Ideal Power’s higher probable upside, analysts clearly believe Ideal Power is more favorable than Sunrun.

Insider & Institutional Ownership

73.5% of Sunrun shares are held by institutional investors. Comparatively, 26.8% of Ideal Power shares are held by institutional investors. 24.1% of Sunrun shares are held by insiders. Comparatively, 10.4% of Ideal Power 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.

Summary

Sunrun beats Ideal Power on 8 of the 12 factors compared between the two stocks.

Sunrun Company Profile

Sunrun Inc. is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (Projects) in the United States. The Company is engaged in providing solar energy services and products to its customers. As of December 31, 2016, it operated a fleet of residential solar energy systems in the United States, with approximately 134,000 customers across 16 states, as well as the District of Columbia. The Company sells to homeowners over the phone, in the field through canvassing and in-home sales and through retail sales channels through its strategic partners. The solar service offerings are provided through its lease and power purchase agreements. It sells solar service offerings and installs solar energy systems for homeowners through its direct-to-consumer channel. It sells solar energy systems to homeowners, as well as related products, such as solar panels, inverters, racking systems and other solar-related equipment to resellers.

Ideal Power Company Profile

Ideal Power Inc. (Ideal Power) designs, markets and sells electrical power conversion products using its Power Packet Switching Architecture (PPSA) technology. The Company’s PPSA is a power conversion technology that utilizes standardized hardware with application specific embedded software. It sells products to systems integrators for integration into their system, which enable end users to manage their electricity consumption by reducing demand charges or fossil fuel consumption, integrating renewable energy sources and form their own microgrid. It focuses on licensing PPSA-based product designs to original equipment manufacturers (OEMs) within its target markets. Its products use multiple insulated gate bipolar transistors (IGBTs), which switch power in a direction, including direct current (DC) to alternating current (AC), or AC to DC. The PPSA uses indirect power flow in which power flows through input switches, and is temporarily stored in its AC link inductor.

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