Head-To-Head Analysis: AZZ (AZZ) & Energy Focus (EFOI)

Energy Focus (NASDAQ: EFOI) and AZZ (NYSE:AZZ) are both small-cap construction companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Risk and Volatility

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Energy Focus has a beta of -0.03, meaning that its share price is 103% less volatile than the S&P 500. Comparatively, AZZ has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Valuation & Earnings

This table compares Energy Focus and AZZ’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Focus $19.85 million 1.40 -$11.26 million ($0.79) -2.96
AZZ $858.93 million 1.39 $60.92 million $2.50 18.38

AZZ has higher revenue and earnings than Energy Focus. Energy Focus is trading at a lower price-to-earnings ratio than AZZ, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Energy Focus and AZZ, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Focus 0 2 1 0 2.33
AZZ 0 1 0 0 2.00

Energy Focus presently has a consensus target price of $3.63, indicating a potential upside of 54.91%. AZZ has a consensus target price of $52.00, indicating a potential upside of 13.17%. Given Energy Focus’ stronger consensus rating and higher possible upside, equities analysts clearly believe Energy Focus is more favorable than AZZ.

Dividends

AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Energy Focus does not pay a dividend. AZZ pays out 27.2% of its earnings in the form of a dividend. AZZ has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

16.0% of Energy Focus shares are held by institutional investors. Comparatively, 92.6% of AZZ shares are held by institutional investors. 11.4% of Energy Focus shares are held by insiders. Comparatively, 0.0% of AZZ shares are held by 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.

Profitability

This table compares Energy Focus and AZZ’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Focus -56.77% -43.83% -37.26%
AZZ 6.27% 9.65% 5.13%

Summary

AZZ beats Energy Focus on 11 of the 17 factors compared between the two stocks.

Energy Focus Company Profile

Energy Focus, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and sells energy-efficient lighting systems in the United States and internationally. It offers various light-emitting diode (LED) lighting technologies, including military maritime products, such as Military Intellitube, globe lights, berth lights, and fixtures to serve the United States navy and allied foreign navies. The company also provides commercial products comprising direct-wire tubular LED (TLED) replacements for linear fluorescent lamps; Commercial Intellitube TLED replacement for linear fluorescent lamps; LED fixtures and panels for fluorescent replacement or high-intensity discharge replacement in low-bay and high-bay applications; LED down-lights; LED dock lights and wall-packs; LED vapor tight lighting fixtures; and LED retrofit kits. Energy Focus, Inc. sells its products to military maritime, industrial, and general commercial markets through direct sales employees, independent sales representatives, electrical and lighting contractors, and distributors. The company was formerly known as Fiberstars, Inc. and changed its name to Energy Focus, Inc. in May 2007. Energy Focus, Inc. was founded in 1985 and is headquartered in Solon, Ohio.

AZZ Company Profile

AZZ Inc. provides galvanizing services, welding solutions, specialty electrical equipment, and highly engineered services to the power generation, transmission, distribution, refining, and industrial markets. The company operates through two segments, Energy and Galvanizing Services. The Energy segment provides specialized products and services designed to support industrial, nuclear, and electrical applications. This segment offers custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, nuclear safety-related equipment, and tubular products to multi-national companies, and small independent companies. This segment sells its products through manufacturers' representatives, distributors, agents, and internal sales force. The Galvanizing Services segment offers hot dip galvanizing services to the steel fabrication industry. This segment serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical, and general industrial markets, as well as original equipment manufacturers. As of February 28, 2017, the company operated 41 galvanizing plants located in Alabama, Arkansas, Arizona, Colorado, Indiana, Illinois, Louisiana, Kentucky, Minnesota, Mississippi, Missouri, Nebraska, Nevada, Ohio, Oklahoma, Tennessee, Texas, Virginia, and West Virginia in the United States; and Ontario, Quebec, and Nova Scotia, Canada. AZZ incorporated was founded in 1956 and is based in Fort Worth, Texas.

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