GrafTech International (NYSE:EAF) & Energy Focus (NASDAQ:EFOI) Critical Survey

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

Earnings & Valuation

This table compares GrafTech International and Energy Focus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrafTech International	$504.13 million	0.34	-$219.84 million	($6.80)	-0.97
Energy Focus	$3.56 million	5.05	-$1.03 million	($0.25)	-11.28

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

Risk & Volatility

GrafTech International has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, Energy Focus has a beta of 2.17, meaning that its stock price is 117% more volatile than the S&P 500.

Insider and Institutional Ownership

92.8% of GrafTech International shares are owned by institutional investors. Comparatively, 3.7% of Energy Focus shares are owned by institutional investors. 1.2% of GrafTech International shares are owned by insiders. Comparatively, 48.9% of Energy Focus shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares GrafTech International and Energy Focus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GrafTech International	-34.58%	N/A	-17.50%
Energy Focus	-23.77%	-42.44%	-25.33%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for GrafTech International and Energy Focus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrafTech International	3	3	0	0	1.50
Energy Focus	1	0	0	0	1.00

GrafTech International currently has a consensus price target of $10.67, suggesting a potential upside of 61.74%. Given GrafTech International’s stronger consensus rating and higher possible upside, equities research analysts plainly believe GrafTech International is more favorable than Energy Focus.

Summary

GrafTech International beats Energy Focus on 7 of the 13 factors compared between the two stocks.

About GrafTech International

GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide. The company offers graphite electrodes to produce electric arc furnace steel and other ferrous and non-ferrous metals; and petroleum needle coke, a crystalline form of carbon used in the production of graphite electrodes and synthetic graphite. It sells its products primarily through direct sales force, independent sales representatives, and distributors. GrafTech International Ltd. was founded in 1886 and is headquartered in Brooklyn Heights, Ohio.

About Energy Focus

Energy Focus, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and sells energy-efficient lighting systems, and controls and ultraviolet-C light disinfection products in the United States and internationally. It offers military maritime market light-emitting diode (LED) lighting products, such as Military-grade Intellitube retrofit TLED and the Invisitube ultra-low EMI TLED; and Military-grade fixtures, including LED globe lights, berth lights; high-bay fixtures and LED retrofit kits to serve the United States navy and allied foreign navies. The company also provides RedCap emergency battery backup TLEDs; EnFocus lighting platform, including dimming and color tuning; and LED retrofit solutions for linear fluorescent lamps, downlights, and retrofit kits for low-bay, high-bay and office applications; LED dock lights. It sells its products to military maritime, industrial, and commercial markets through direct sales employees, independent sales representatives, lighting agents, and distributors, as well as via e-commerce. 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.