Clearway Energy (NYSE:CWEN) & Gevo (NASDAQ:GEVO) Critical Survey

Clearway Energy (NYSE:CWEN) and Gevo (NASDAQ:GEVO) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Volatility & Risk

Clearway Energy has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Gevo has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Profitability

This table compares Clearway Energy and Gevo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clearway Energy	0.13%	0.04%	0.01%
Gevo	-19.38%	-5.06%	-3.41%

Earnings and Valuation

This table compares Clearway Energy and Gevo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clearway Energy	$1.43 billion	5.91	$169.00 million	$0.04	1,028.60
Gevo	$160.58 million	2.82	-$33.84 million	($0.13)	-14.31

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Clearway Energy and Gevo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clearway Energy	0	3	5	1	2.78
Gevo	2	1	2	0	2.00

Clearway Energy currently has a consensus target price of $43.00, suggesting a potential upside of 4.51%. Gevo has a consensus target price of $2.75, suggesting a potential upside of 47.85%. Given Gevo’s higher probable upside, analysts clearly believe Gevo is more favorable than Clearway Energy.

Insider and Institutional Ownership

84.5% of Clearway Energy shares are held by institutional investors. Comparatively, 35.2% of Gevo shares are held by institutional investors. 0.5% of Clearway Energy shares are held by company insiders. Comparatively, 7.1% of Gevo shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Clearway Energy beats Gevo on 12 of the 15 factors compared between the two stocks.

About Clearway Energy

Clearway Energy, Inc. operates in the renewable energy business in the United States. The company operates through Conventional and Renewables segments. It has approximately 6,000 net MW of installed wind, solar, and energy generation projects; and approximately 2,500 net MW of natural gas-fired generation facilities. The company was formerly known as NRG Yield, Inc. and changed its name to Clearway Energy, Inc. in August 2018. Clearway Energy, Inc. was incorporated in 2012 and is based in Princeton, New Jersey. Clearway Energy, Inc. is a subsidiary of Clearway Energy Group LLC.

About Gevo

Gevo, Inc. operates as a carbon abatement company. It operates through three segments: Gevo, Agri-Energy, and Renewable Natural Gas. The company focuses on transforming renewable energy into energy-dense liquid hydrocarbons that can be used as renewable fuels. It offers renewable gasoline and diesel, isobutanol, sustainable aviation fuel, renewable natural gas, isobutylene, ethanol, and animal feed and protein. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006. Gevo, Inc. was incorporated in 2005 and is headquartered in Englewood, Colorado.