Head-To-Head Comparison: Orion Energy Systems (OESX) vs. AZZ (AZZ)

Orion Energy Systems (NASDAQ: OESX) 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 analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Risk & Volatility

Orion Energy Systems has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, AZZ has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Dividends

AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.6%. Orion Energy Systems does not pay a dividend. AZZ pays out 50.4% of its earnings in the form of a dividend. AZZ has increased its dividend for 4 consecutive years.

Valuation and Earnings

This table compares Orion Energy Systems 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
Orion Energy Systems $70.21 million 0.36 -$12.28 million ($0.44) -2.00
AZZ $810.43 million 1.39 $45.16 million $1.35 32.00

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

Institutional & Insider Ownership

41.5% of Orion Energy Systems shares are owned by institutional investors. Comparatively, 95.2% of AZZ shares are owned by institutional investors. 9.2% of Orion Energy Systems shares are owned by insiders. Comparatively, 0.0% of AZZ shares are owned 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 Orion Energy Systems and AZZ’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orion Energy Systems -31.32% -57.15% -32.21%
AZZ 5.56% 4.63% 2.50%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Orion Energy Systems and AZZ, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orion Energy Systems 0 1 1 0 2.50
AZZ 0 1 0 0 2.00

Orion Energy Systems currently has a consensus target price of $1.50, indicating a potential upside of 70.47%. AZZ has a consensus target price of $47.00, indicating a potential upside of 8.80%. Given Orion Energy Systems’ stronger consensus rating and higher probable upside, research analysts clearly believe Orion Energy Systems is more favorable than AZZ.

Summary

AZZ beats Orion Energy Systems on 12 of the 17 factors compared between the two stocks.

Orion Energy Systems Company Profile

Orion Energy Systems, Inc. researches, designs, develops, manufactures, implements, markets, and sells energy management systems for the commercial office and retail, area lighting, and industrial markets in North America. The company operates in three segments: Orion U.S. Markets Division, Orion Engineered Systems Division, and Orion Distribution Services Division. It offers LED Troffer Door Retrofit for use in office or retail grid ceilings; and LED interior high bay lighting products consisting of Apollo class of LED interior fixtures designed for new construction and retrofit projects, as well as offers ISON class of LED interior fixtures. The company also provides a range of smart building control systems that provide lighting control options and data intelligence capabilities for building managers under the InteLite brand, as well as procures from third parties; and various other LED, HIF, and induction fixtures for lighting and energy management needs, including fixtures for agribusinesses, parking lots, roadways, retail, mezzanine, outdoor applications, and private label resale. In addition, it offers lighting-related energy management services, such as site assessment, site field verification, utility incentive and government subsidy management, engineering design, project management, and installation. The company serves customers directly, as well as through independent sales agencies and electrical distributors. Orion Energy Systems, Inc. was founded in 1996 and is headquartered in Manitowoc, Wisconsin.

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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