Ormat Technologies (ORA) and Its Rivals Critical Review

Ormat Technologies (NYSE:ORA) is one of 141 publicly-traded companies in the “Independent Power & Renewable Electricity Producers” industry, but how does it compare to its peers? We will compare Ormat Technologies to similar businesses based on the strength of its dividends, institutional ownership, valuation, analyst recommendations, profitability, risk and earnings.

Profitability

This table compares Ormat Technologies and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ormat Technologies	11.07%	6.90%	2.83%
Ormat Technologies Competitors	-33.50%	10.95%	0.89%

Insider and Institutional Ownership

95.5% of Ormat Technologies shares are owned by institutional investors. Comparatively, 35.2% of shares of all “Independent Power & Renewable Electricity Producers” companies are owned by institutional investors. 0.5% of Ormat Technologies shares are owned by insiders. Comparatively, 21.7% of shares of all “Independent Power & Renewable Electricity Producers” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Ormat Technologies has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Ormat Technologies’ peers have a beta of 0.62, meaning that their average stock price is 38% less volatile than the S&P 500.

Dividends

Ormat Technologies pays an annual dividend of $0.48 per share and has a dividend yield of 0.5%. Ormat Technologies pays out 22.3% of its earnings in the form of a dividend. As a group, “Independent Power & Renewable Electricity Producers” companies pay a dividend yield of 6.5% and pay out 189.9% of their earnings in the form of a dividend.

Valuation & Earnings

This table compares Ormat Technologies and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Ormat Technologies	$989.54 million	$123.90 million	42.77
Ormat Technologies Competitors	$8.69 billion	$801.06 million	1.13

Ormat Technologies’ peers have higher revenue and earnings than Ormat Technologies. Ormat Technologies is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations and price targets for Ormat Technologies and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ormat Technologies	1	6	8	1	2.56
Ormat Technologies Competitors	963	2984	3818	188	2.41

Ormat Technologies currently has a consensus price target of $125.77, suggesting a potential upside of 36.76%. As a group, “Independent Power & Renewable Electricity Producers” companies have a potential upside of 150.14%. Given Ormat Technologies’ peers higher probable upside, analysts plainly believe Ormat Technologies has less favorable growth aspects than its peers.

Summary

Ormat Technologies beats its peers on 9 of the 15 factors compared.

Ormat Technologies Company Profile

Ormat Technologies, Inc. engages in the geothermal and recovered energy power business in the United States, Indonesia, Kenya, Turkey, Chile, Guatemala, Guadeloupe, New Zealand, Honduras, and internationally. It operates in three segments: Electricity, Product, and Energy Storage. The Electricity segment develops, builds, owns, and operates geothermal, solar photovoltaic, and recovered energy-based power plants; and sells electricity. The Product segment designs, manufactures, and sells equipment for geothermal and recovered energy-based electricity generation; and provides services relating to the engineering, procurement, construction, operation, and maintenance of geothermal and recovered energy-based power plants. This segment serves contractors; and owners and operators of interstate natural gas pipelines, gas processing plants, and cement plants, as well as companies in other energy-intensive industrial processes. The Energy Storage segment offers battery energy storage systems and related services. Ormat Technologies, Inc. was founded in 1965 and is headquartered in Reno, Nevada.