DAQO New Energy Corp. (NYSE: DQ) and First Solar (NASDAQ:FSLR) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.
This table compares DAQO New Energy Corp. and First Solar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|DAQO New Energy Corp.||19.35%||18.90%||8.18%|
Institutional & Insider Ownership
31.7% of DAQO New Energy Corp. shares are owned by institutional investors. Comparatively, 60.3% of First Solar shares are owned by institutional investors. 0.4% of First Solar shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
DAQO New Energy Corp. has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, First Solar has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500.
This is a summary of current ratings and target prices for DAQO New Energy Corp. and First Solar, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|DAQO New Energy Corp.||0||0||2||0||3.00|
DAQO New Energy Corp. presently has a consensus price target of $37.50, indicating a potential upside of 48.05%. First Solar has a consensus price target of $44.37, indicating a potential downside of 7.68%. Given DAQO New Energy Corp.’s stronger consensus rating and higher probable upside, research analysts plainly believe DAQO New Energy Corp. is more favorable than First Solar.
Valuation and Earnings
This table compares DAQO New Energy Corp. and First Solar’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|DAQO New Energy Corp.||$260.21 million||1.02||$116.94 million||$4.72||5.37|
|First Solar||$2.57 billion||1.95||$296.64 million||($4.84)||-9.93|
First Solar has higher revenue and earnings than DAQO New Energy Corp.. First Solar is trading at a lower price-to-earnings ratio than DAQO New Energy Corp., indicating that it is currently the more affordable of the two stocks.
First Solar beats DAQO New Energy Corp. on 8 of the 14 factors compared between the two stocks.
DAQO New Energy Corp. Company Profile
Daqo New Energy Corp. is a polysilicon manufacturer. The Company utilizes the chemical vapor deposition process, or the modified Siemens process, to produce polysilicon. The Company’s segments include Polysilicon and Wafer. The Company manufactures and sells polysilicon to photovoltaic product manufacturers, whereby the polysilicon is processed into ingots, wafers, cells and modules for solar power solutions. The Company offers ready-to-use polysilicon, packaged to meet crucible stacking, pulling and solidification needs. The Company offers wafers through its downstream photovoltaic product manufacturing business. The Company also provides wafer original equipment manufacturer (OEM) service to external customers through tolling agreements by processing polysilicon to produce ingot and wafer. Its annual capacity for polysilicon is approximately 12,150 metric tons (MT) in Xinjiang. The Company’s wafer manufacturing annual capacity is approximately 90 million pieces.
First Solar Company Profile
First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company’s solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.
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