Alto Ingredients (NASDAQ:ALTO) versus Permian Resources (NYSE:PR) Critical Analysis

Permian Resources (NYSE:PR) and Alto Ingredients (NASDAQ:ALTO) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Institutional and Insider Ownership

91.8% of Permian Resources shares are held by institutional investors. Comparatively, 42.4% of Alto Ingredients shares are held by institutional investors. 5.0% of Permian Resources shares are held by company insiders. Comparatively, 4.3% of Alto Ingredients shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Permian Resources has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Alto Ingredients has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Profitability

This table compares Permian Resources and Alto Ingredients’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Permian Resources	21.52%	13.47%	8.66%
Alto Ingredients	5.51%	18.54%	11.61%

Analyst Ratings

This is a summary of recent ratings for Permian Resources and Alto Ingredients, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Resources	0	2	15	5	3.14
Alto Ingredients	0	2	1	1	2.75

Permian Resources currently has a consensus target price of $26.67, suggesting a potential upside of 17.29%. Alto Ingredients has a consensus target price of $10.00, suggesting a potential upside of 182.09%. Given Alto Ingredients’ higher possible upside, analysts clearly believe Alto Ingredients is more favorable than Permian Resources.

Earnings & Valuation

This table compares Permian Resources and Alto Ingredients”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Resources	$5.07 billion	3.76	$935.17 million	$1.51	15.06
Alto Ingredients	$917.93 million	0.30	$13.34 million	$0.67	5.29

Permian Resources has higher revenue and earnings than Alto Ingredients. Alto Ingredients is trading at a lower price-to-earnings ratio than Permian Resources, indicating that it is currently the more affordable of the two stocks.

Summary

Permian Resources beats Alto Ingredients on 12 of the 15 factors compared between the two stocks.

About Permian Resources

Permian Resources Corporation, an independent oil and natural gas company, focuses on the development of crude oil and related liquids-rich natural gas reserves in the United States. The company’s assets primarily focus on the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of acreage blocks in West Texas, Eddy County, Lea County, and New Mexico. The company was formerly known as Centennial Resource Development, Inc. and changed its name to Permian Resources Corporation in September 2022. Permian Resources Corporation was incorporated in 2015 and is headquartered in Midland, Texas.

About Alto Ingredients

Alto Ingredients, Inc. produces, distributes, and markets specialty alcohols, renewable fuel, and essential ingredients in the United States. The company operates in three segments: Marketing and Distribution, Pekin Campus Production, and Western Production. It offers specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants, and cleaners for health, home, and beauty markets; grain neutral spirits used in alcoholic beverages and vinegar, as well as corn germ used in corn oils in the food and beverage markets; alcohols and other products for paint applications and fertilizers in the industrial and agriculture markets; and essential ingredients include dried yeast, corn protein meal, corn protein feed, distiller's grains, and liquid feed for commercial animal feed and pet food applications, as well as yeast for human consumption. The company also provides fuel-grade ethanol used as transportation fuel and distillers corn oil used as a biodiesel feedstock, as well as fuel-grade ethanol produced by third parties. In addition, it offers transportation, storage, and delivery services through third-party service providers. The company sells ethanol to integrated oil companies and gasoline marketers; essential ingredient feed products to dairies and feedlots; and corn oil to poultry, renewable diesel, and biodiesel customers. It operates alcohol production facilities. The company was formerly known as Pacific Ethanol, Inc. and changed its name to Alto Ingredients, Inc. in January 2021. Alto Ingredients, Inc. was founded in 2003 and is headquartered in Pekin, Illinois.