Gevo (NASDAQ: GEVO) and Green Plains (NASDAQ:GPRE) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
7.0% of Gevo shares are held by institutional investors. 0.1% of Gevo shares are held by insiders. Comparatively, 5.9% of Green Plains shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a summary of recent recommendations for Gevo and Green Plains, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Gevo presently has a consensus price target of $12.00, indicating a potential upside of 3,653.52%. Green Plains has a consensus price target of $26.20, indicating a potential upside of 25.36%. Given Gevo’s higher possible upside, equities research analysts plainly believe Gevo is more favorable than Green Plains.
This table compares Gevo and Green Plains’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Gevo and Green Plains’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Gevo||$27.54 million||0.28||-$24.63 million||($1.61)||-0.20|
|Green Plains||$3.60 billion||0.24||$61.06 million||($0.86)||-24.30|
Green Plains has higher revenue and earnings than Gevo. Green Plains is trading at a lower price-to-earnings ratio than Gevo, indicating that it is currently the more affordable of the two stocks.
Green Plains pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. Gevo does not pay a dividend. Green Plains pays out -55.8% of its earnings in the form of a dividend.
Volatility and Risk
Gevo has a beta of 2.34, meaning that its share price is 134% more volatile than the S&P 500. Comparatively, Green Plains has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.
Green Plains beats Gevo on 11 of the 16 factors compared between the two stocks.
Gevo, Inc., a renewable chemicals and biofuels company, focuses on the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks in the United States. It operates through two segments, Gevo, Inc. and Gevo Development/Agri-Energy. The company engages in the research and development, and production of isobutanol; development of its proprietary biocatalysts; production and sale of biojet fuel; and retrofit process of chemicals and biofuels. It is also involved in the production of ethanol, isobutanol, and related products. In addition, the company produces and separates its renewable isobutanol through the Gevo Integrated Fermentation Technology platform. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006. Gevo, Inc. was founded in 2005 and is headquartered in Englewood, Colorado.
About Green Plains
Green Plains Inc. produces, markets, and distributes ethanol in the United States and internationally. The company operates through four segments: Ethanol Production; Agribusiness and Energy Services; Food and Ingredients; and Partnership. The Ethanol Production segment produces and sells ethanol, distiller grains, and corn oil. The Agribusiness and Energy Services segment engages in the grain procurement, handling, and storage activities; and commodity marketing business, which purchases, markets, sells, and distributes ethanol, distiller grains, and corn oil, as well as crude oil, grain, natural gas, and other commodities in various markets. This segment also provides grain drying and storage services to grain producers. The Food and Ingredients segment purchases and sells feeder cattle to meat processors; and produces and sells white distilled vinegar and various specialty vinegar, such as balsamic, red wine, white wine, cider, and other varietals primarily to the food industry participants, including branded food companies, private label food manufacturers, and companies serving the foodservice channel, as well as for retail and industrial uses. This segment also produces, trades in, and sells corn and soybean oil. The Partnership segment offers fuel storage and transportation services. As of December 31, 2017, this segment owned 39 ethanol storage facilities; 8 fuel terminal facilities; and approximately a fleet of 3,500 leased railcars. The company was formerly known as Green Plains Renewable Energy, Inc. and changed its name to Green Plains Inc. in May 2014. Green Plains Inc. was founded in 2004 and is headquartered in Omaha, Nebraska.
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