Critical Contrast: Zeo Energy (NASDAQ:ZEO) and China BAK Battery (NASDAQ:CBAT)

China BAK Battery (NASDAQ:CBAT) and Zeo Energy (NASDAQ:ZEO) are both small-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Institutional and Insider Ownership

2.0% of China BAK Battery shares are owned by institutional investors. 0.8% of China BAK Battery shares are owned by insiders. Comparatively, 33.5% of Zeo Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares China BAK Battery and Zeo Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China BAK Battery	$195.19 million	0.47	-$9.38 million	($0.18)	-5.78
Zeo Energy	$71.82 million	0.20	-$14.01 million	($0.33)	-0.75

China BAK Battery has higher revenue and earnings than Zeo Energy. China BAK Battery is trading at a lower price-to-earnings ratio than Zeo Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for China BAK Battery and Zeo Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China BAK Battery	1	0	0	0	1.00
Zeo Energy	1	0	0	0	1.00

Profitability

This table compares China BAK Battery and Zeo Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China BAK Battery	-7.43%	-15.32%	-4.23%
Zeo Energy	-15.43%	-166.89%	-19.44%

Volatility and Risk

China BAK Battery has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Zeo Energy has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Summary

China BAK Battery beats Zeo Energy on 9 of the 11 factors compared between the two stocks.

About China BAK Battery

CBAK Energy Technology, Inc., together with its subsidiaries, manufacture, commercialization, and distribution of lithium ion high power rechargeable batteries in Mainland China, the United States, Europe, and internationally. The company operates in two segments, CBAK and Hitrans. Its lithium batteries are used in various applications, including electric vehicles, such as electric cars, electric buses, and hybrid electric cars and buses; light electric vehicles, such as electric bicycles, electric motors, electric tricycles, and smaller-sized electric cars; and electric tools, energy storage, uninterruptible power supply, and other high power applications, as well as cordless power tools. The company also develops and manufactures NCM precursor and cathode materials. The company was formerly known as China BAK Battery, Inc. and changed its name to CBAK Energy Technology, Inc. in January 2017. CBAK Energy Technology, Inc. is based in Dalian, China.

About Zeo Energy

Zeo Energy Corp. provides residential solar energy systems, other energy efficient equipment, and related services in Florida, Texas, Arkansas, and Missouri, the United States. The company is involved in the selling and installing of residential solar energy systems that homeowners use electricity required to power their homes. Its residential solar energy systems comprise solar panels, inverters, and racking systems. It also offers insulation services, such as adding insulation to a home's attic or walls; energy efficiency equipment, including hybrid electric water heaters and swimming pool pumps; battery-based energy storage systems; and roofing services. Zeo Energy Corp. was founded in 2005 and is headquartered in New Port Richey, Florida.