Epsilon Energy (NASDAQ:EPSN – Get Free Report) and Alto Ingredients (NASDAQ:ALTO – Get Free Report) are both small-cap energy 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.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Epsilon Energy and Alto Ingredients, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Epsilon Energy | 0 | 1 | 0 | 0 | 2.00 |
| Alto Ingredients | 0 | 2 | 1 | 0 | 2.33 |
Alto Ingredients has a consensus price target of $10.00, suggesting a potential upside of 168.10%. Given Alto Ingredients’ stronger consensus rating and higher possible upside, analysts plainly believe Alto Ingredients is more favorable than Epsilon Energy.
Risk and Volatility
Institutional and Insider Ownership
60.3% of Epsilon Energy shares are owned by institutional investors. Comparatively, 42.4% of Alto Ingredients shares are owned by institutional investors. 28.4% of Epsilon Energy shares are owned by company insiders. Comparatively, 4.3% of Alto Ingredients 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.
Profitability
This table compares Epsilon Energy and Alto Ingredients’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Epsilon Energy | -3.77% | 5.56% | 3.26% |
| Alto Ingredients | 5.51% | 18.54% | 11.61% |
Valuation and Earnings
This table compares Epsilon Energy and Alto Ingredients”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Epsilon Energy | $67.66 million | 2.65 | -$5.80 million | ($0.21) | -28.24 |
| Alto Ingredients | $943.33 million | 0.31 | $13.34 million | $0.67 | 5.57 |
Alto Ingredients has higher revenue and earnings than Epsilon Energy. Epsilon Energy is trading at a lower price-to-earnings ratio than Alto Ingredients, indicating that it is currently the more affordable of the two stocks.
Summary
Alto Ingredients beats Epsilon Energy on 11 of the 14 factors compared between the two stocks.
About Epsilon Energy
Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.
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.
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