Alto Ingredients (NASDAQ:ALTO) and KNOT Offshore Partners (NYSE:KNOP) Critical Analysis

Alto Ingredients (NASDAQ:ALTO) and KNOT Offshore Partners (NYSE:KNOP) are both small-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Alto Ingredients and KNOT Offshore Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alto Ingredients	0	2	1	0	2.33
KNOT Offshore Partners	0	3	1	1	2.60

Alto Ingredients presently has a consensus target price of $10.00, suggesting a potential upside of 150.00%. KNOT Offshore Partners has a consensus target price of $14.00, suggesting a potential upside of 24.17%. Given Alto Ingredients’ higher possible upside, analysts plainly believe Alto Ingredients is more favorable than KNOT Offshore Partners.

Profitability

This table compares Alto Ingredients and KNOT Offshore Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alto Ingredients	5.51%	18.54%	11.61%
KNOT Offshore Partners	3.90%	5.73%	1.84%

Insider and Institutional Ownership

42.4% of Alto Ingredients shares are owned by institutional investors. Comparatively, 26.8% of KNOT Offshore Partners shares are owned by institutional investors. 4.3% of Alto Ingredients shares are owned by company 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.

Valuation & Earnings

This table compares Alto Ingredients and KNOT Offshore Partners”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alto Ingredients	$917.93 million	0.34	$13.34 million	$0.67	5.97
KNOT Offshore Partners	$364.44 million	1.04	$22.96 million	$0.44	25.62

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

Risk & Volatility

Alto Ingredients has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500. Comparatively, KNOT Offshore Partners has a beta of -0.05, indicating that its stock price is 105% less volatile than the S&P 500.

Summary

Alto Ingredients beats KNOT Offshore Partners on 9 of the 14 factors compared between the two stocks.

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.

About KNOT Offshore Partners

KNOT Offshore Partners LP acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, and discharge of crude oil under time charters and bareboat charters. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.