Financial Analysis: SmartHeat (HEAT) vs. Vivint Solar (VSLR)

SmartHeat (OTCMKTS:HEAT) and Vivint Solar (NYSE:VSLR) are both industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares SmartHeat and Vivint Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SmartHeat N/A N/A N/A
Vivint Solar 61.71% -50.31% -11.01%

Institutional and Insider Ownership

89.4% of Vivint Solar shares are owned by institutional investors. 2.2% of SmartHeat shares are owned by company insiders. Comparatively, 4.2% of Vivint Solar shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for SmartHeat and Vivint Solar, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SmartHeat 0 0 0 0 N/A
Vivint Solar 0 0 3 0 3.00

Vivint Solar has a consensus price target of $6.00, suggesting a potential upside of 14.94%. Given Vivint Solar’s higher possible upside, analysts plainly believe Vivint Solar is more favorable than SmartHeat.

Valuation & Earnings

This table compares SmartHeat and Vivint Solar’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SmartHeat $770,000.00 0.00 -$8.38 million N/A N/A
Vivint Solar $268.03 million 2.32 $209.09 million ($1.58) -3.30

Vivint Solar has higher revenue and earnings than SmartHeat.

Risk and Volatility

SmartHeat has a beta of 3.38, meaning that its stock price is 238% more volatile than the S&P 500. Comparatively, Vivint Solar has a beta of -0.36, meaning that its stock price is 136% less volatile than the S&P 500.

Summary

Vivint Solar beats SmartHeat on 8 of the 11 factors compared between the two stocks.

SmartHeat Company Profile

SmartHeat Inc. does not have significant operations. It intends to seek potential assets, property, or businesses to acquire, in a business combination, by reorganization, merger, or acquisition. Previously, it was engaged in the manufacture and sale of heat pumps for commercial and residential applications. The company was formerly known as Pacific Goldrim Resources, Inc. and changed its name to SmartHeat Inc. in April 2008. SmartHeat Inc. was incorporated in 2006 and is headquartered in Shenyang, China.

Vivint Solar Company Profile

Vivint Solar, Inc. provides distributed solar energy to residential, commercial, and industrial customers in the United States. The company operates in two segments, Residential, and Commercial and Industrial. It owns and installs solar energy systems through long-term customer contracts. The company also sells photovoltaic installation products, as well as solar renewable energy certificates. As of December 31, 2017, it had an aggregate capacity of 864.9 megawatts covering approximately 126,800 homes in 21 states. The company was formerly known as V Solar Holdings, Inc. and changed its name to Vivint Solar, Inc. in April 2014. Vivint Solar, Inc. was founded in 2011 and is headquartered in Lehi, Utah.

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