Head to Head Analysis: Acuity Brands (NYSE:AYI) versus Orion Energy Systems (OESX)

Acuity Brands (NYSE: AYI) and Orion Energy Systems (NASDAQ:OESX) are both construction companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Earnings and Valuation

This table compares Acuity Brands and Orion Energy Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acuity Brands $3.47 billion 2.21 $584.60 million $7.18 24.84
Orion Energy Systems $67.14 million 0.39 -$11.57 million ($0.56) -1.64

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

Analyst Recommendations

This is a summary of recent recommendations for Acuity Brands and Orion Energy Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acuity Brands 2 3 10 0 2.53
Orion Energy Systems 0 2 1 0 2.33

Acuity Brands presently has a consensus target price of $220.64, suggesting a potential upside of 23.73%. Orion Energy Systems has a consensus target price of $2.00, suggesting a potential upside of 117.39%. Given Orion Energy Systems’ higher probable upside, analysts clearly believe Orion Energy Systems is more favorable than Acuity Brands.

Institutional and Insider Ownership

95.2% of Acuity Brands shares are held by institutional investors. Comparatively, 45.2% of Orion Energy Systems shares are held by institutional investors. 1.4% of Acuity Brands shares are held by insiders. Comparatively, 9.2% of Orion Energy Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Acuity Brands and Orion Energy Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acuity Brands 9.04% 19.89% 11.50%
Orion Energy Systems -23.70% -37.61% -22.58%

Dividends

Acuity Brands pays an annual dividend of $0.52 per share and has a dividend yield of 0.3%. Orion Energy Systems does not pay a dividend. Acuity Brands pays out 7.2% of its earnings in the form of a dividend.

Risk & Volatility

Acuity Brands has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Orion Energy Systems has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Summary

Acuity Brands beats Orion Energy Systems on 11 of the 15 factors compared between the two stocks.

About Acuity Brands

Acuity Brands, Inc. is a provider of lighting solutions for commercial, institutional, industrial, infrastructure and residential applications throughout North America and other international markets. The Company operates through North American segment. The Company offers a portfolio of indoor and outdoor lighting and building management solutions for commercial, institutional, industrial, infrastructure and residential applications. The portfolio of lighting solutions include lighting products utilizing fluorescent, light emitting diode (LED), organic LED (OLED), high intensity discharge, metal halide, and incandescent light sources to illuminate a number of applications. The solutions portfolio of the Company also includes modular wiring, LED drivers, sensors, glass and inverters sold primarily to original equipment manufacturers (OEMs). Its lighting and building management solutions are marketed under various brand names, including Lithonia Lighting and Holophane.

About Orion Energy Systems

Orion Energy Systems, Inc. is a designer and manufacturer of lighting platforms. The Company researches, develops, designs, manufactures, markets, sells and implements energy management systems consisting primarily of commercial and industrial interior and exterior lighting systems, and related services. The Company operates through three segments: Orion U.S. Markets Division (USM), Orion Engineered Systems Division (OES) and Distribution Services Division (ODS). The USM division develops and sells its commercial lighting systems and energy management systems to the wholesale contractor markets. The OES division develops and sells lighting products, and provides construction and engineering services for its commercial light emitting diode (LED) and high intensity fluorescent (HIF) lighting and energy management systems. The ODS division focuses on selling its lighting products through manufacturer representative agencies and a network of broadline North American distributors.

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