Comparing Canadian Solar (NASDAQ:CSIQ) & Shoals Technologies Group (NASDAQ:SHLS)

Shoals Technologies Group (NASDAQ:SHLS) and Canadian Solar (NASDAQ:CSIQ) are both small-cap energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Profitability

This table compares Shoals Technologies Group and Canadian Solar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shoals Technologies Group	7.66%	8.50%	6.01%
Canadian Solar	0.27%	-5.28%	-1.44%

Institutional and Insider Ownership

52.4% of Canadian Solar shares are owned by institutional investors. 1.7% of Shoals Technologies Group shares are owned by company insiders. Comparatively, 21.5% of Canadian Solar shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Shoals Technologies Group has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500. Comparatively, Canadian Solar has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Shoals Technologies Group and Canadian Solar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoals Technologies Group	2	7	13	0	2.50
Canadian Solar	5	4	2	0	1.73

Shoals Technologies Group currently has a consensus price target of $8.84, suggesting a potential downside of 0.09%. Canadian Solar has a consensus price target of $19.85, suggesting a potential downside of 12.37%. Given Shoals Technologies Group’s stronger consensus rating and higher possible upside, analysts clearly believe Shoals Technologies Group is more favorable than Canadian Solar.

Valuation & Earnings

This table compares Shoals Technologies Group and Canadian Solar”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shoals Technologies Group	$433.99 million	3.41	$24.13 million	$0.20	44.25
Canadian Solar	$5.90 billion	0.26	$36.05 million	($0.36)	-62.92

Canadian Solar has higher revenue and earnings than Shoals Technologies Group. Canadian Solar is trading at a lower price-to-earnings ratio than Shoals Technologies Group, indicating that it is currently the more affordable of the two stocks.

Summary

Shoals Technologies Group beats Canadian Solar on 10 of the 14 factors compared between the two stocks.

About Shoals Technologies Group

Shoals Technologies Group, Inc. provides electrical balance of system (EBOS) solutions and components for solar, battery energy, and electric vehicle (EV) charging applications in the United States and internationally. The company designs, manufactures, and sells system solutions for both homerun and combine-as-you-go wiring architectures, as well as offers technical support services. It provides EBOS components, including combiners; plug-n-play branch connectors and inline fuses; AC disconnects; recombiners; wireless monitoring; junction boxes; wire management; EV power cabinets; and battery energy storage systems cabinets, as well as cable assemblies, transition enclosures, and splice boxes. In addition, the company offers eMobility solutions, such as a power center, which combines equipment needed to protect the charging equipment and transform voltage levels from the electric utility to those needed on the respective site; quick connect solutions for chargers to connect to the Shoals system; big lead assembly (BLA) technology in the EV space to connect multiple chargers to a single power center; and a raceway system that protects the above ground EV BLAs in walk over and drive over applications. Further, it provides Snapshot IV, a solar operations and maintenance solution that monitors the specific voltage and current of individual solar panels and compares the results against the manufacturer's projected performance. The company sells its products to engineering, procurement, and construction firms that build solar energy projects; utilities; solar developers, independent power producers; solar module manufacturers; and charge point operators. Shoals Technologies Group, Inc. was founded in 1996 and is headquartered in Portland, Tennessee.

About Canadian Solar

Canadian Solar Inc., together with its subsidiaries, provides solar energy and battery energy storage products and solutions in in Asia, the Americas, Europe, and internationally. The company operates through two segments, CSI Solar and Recurrent Energy. The CSI Solar segment designs, develops, and manufactures solar ingots, wafers, cells, modules, and other solar power and battery storage products. It offers standard solar modules and battery storage solutions; solar system kits, such as inverters, racking systems, and other accessories; power electronic products; and engineering, procurement, and construction (EPC) services, as well as operates battery energy storage projects. The Recurrent Energy segment engages in the development, construction, maintenance, and sale of solar power and battery storage projects; and operation of solar power plants; and sale of electricity. This segment provides operation and maintenance (O&M) services, including monitoring, inspections, repair, and replacement of plant equipment; and site management and administrative support services for solar projects, as well as asset management services. It has a fleet of solar and battery energy storage plants in operation with an aggregate capacity of approximately 1,005 MWp and 600 MWh. It serves distributors, system integrators, project developers, and installers/EPC companies, as well as utility companies or grid operators, public utilities, licensed suppliers, corporate offtakers, and commercial, industrial or government end users. It sells its products primarily under its Canadian Solar brand name. Canadian Solar Inc. was incorporated in 2001 and is based in Guelph, Canada.