Renewable energy is gaining prominence on positive impacts to environment as well as the economy. Apart from reducing carbon emissions, alternative sources of energy improve public health and create job opportunities.
A major growth area in the renewable space is solar energy. In Solar industry, few companies are involved in the designing and production of high-efficiency solar modules, panels and cells. Other players are engaged in installation of entire solar power systems. Falling costs of solar panels is boosting global growth of renewable energy.
The U.S. Energy Information Administration (EIA) projects that average U.S. solar generation will increase from 212,000 megawatt hours per day (MWh/d) in 2017 to 303,000 MWh/d in 2019 (up 13%).
In this article we do a comparative analysis on two solar stocks — Azure Power Global Ltd. (NYSE:AZRE) and Canadian Solar Inc. (NASDAQ:CSIQ) — to ascertain which is a better performer and a suitable investment option right now.
Zacks Rank & Market Cap
Azure Power Global sports a Zacks Rank #1 (Strong Buy). The company has a market capitalization of around $369.45 million.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Canadian Solar sports a Zacks Rank #1. It has a market capitalization of $831.77 million.
Surprise Trend
Azure Power Global’s average positive earnings surprise for the trailing four quarters is 76.07%. Canadian Solar came up with an average positive earnings surprise of 49.66% in the last four quarter.
Estimate Movement
The Zacks Consensus Estimate for Canadian Solar’s 2019 EPS is at $2.40 up 31.8% in the last 60 days. Its long-term earnings growth rate (3 to 5 yrs) is pegged at 32%.
The Zacks Consensus Estimate for Azure Power Global’s 2019 earnings per share (EPS) is pegged at 29 cents remained unchanged in last 60 days.
Debt-to-Capital Ratio
The debt-to-capital ratio is a good indicator of the financial position of a company. The indicator shows how much debt is used to conduct business. Azure Power Global has a debt-to-capital ratio of 84.10% compared with Canadian Solar’s 9.09%. Canadian Solar’s debt-to-capital ratio is lower than the industry’s 32.59% and Zacks S&P Composites’ 41.34%.
Price Performance
Shares of Canadian Solar have gained 18.3%, against the industry’s decline of 19.6% in the past six months. Shares Azure Power Global have lost 39.2% in the same time frame.
The Verdict
Our verdict tips toward Canadian Solar considering better growth projections, price performances, debt-to-capital and return on equity.
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Canadian Solar Inc. (CSIQ): Free Stock Analysis Report
Azure Power Global Ltd. (AZRE): Free Stock Analysis Report
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Zacks Investment Research