Critical Review: Babcock (NYSE:BW) & Solid Power (NASDAQ:SLDP)
by Mitch Edgeman · The Markets DailyBabcock (NYSE:BW – Get Free Report) and Solid Power (NASDAQ:SLDP – Get Free Report) are both small-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.
Profitability
This table compares Babcock and Solid Power’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Babcock | -2.17% | -4.51% | 0.70% |
| Solid Power | -485.47% | -19.69% | -18.39% |
Risk and Volatility
Babcock has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Solid Power has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500.
Insider and Institutional Ownership
83.2% of Babcock shares are owned by institutional investors. Comparatively, 33.7% of Solid Power shares are owned by institutional investors. 2.8% of Babcock shares are owned by insiders. Comparatively, 5.7% of Solid Power shares are owned by 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.
Valuation & Earnings
This table compares Babcock and Solid Power”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Babcock | $587.70 million | 1.23 | -$36.16 million | ($0.18) | -26.92 |
| Solid Power | $21.75 million | 21.82 | -$93.41 million | ($0.45) | -4.62 |
Babcock has higher revenue and earnings than Solid Power. Babcock is trading at a lower price-to-earnings ratio than Solid Power, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and target prices for Babcock and Solid Power, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Babcock | 1 | 2 | 4 | 0 | 2.43 |
| Solid Power | 1 | 1 | 3 | 0 | 2.40 |
Babcock currently has a consensus price target of $15.40, suggesting a potential upside of 217.85%. Solid Power has a consensus price target of $6.92, suggesting a potential upside of 232.53%. Given Solid Power’s higher possible upside, analysts plainly believe Solid Power is more favorable than Babcock.
Summary
Babcock beats Solid Power on 9 of the 14 factors compared between the two stocks.
About Babcock
Babcock & Wilcox Enterprises, Inc. engages in the provision of fossil and renewable power generation and environmental equipment. It operates through the following segments: B&W Renewable, B&W Environmental, and B&W Thermal. The B&W Renewable segment supports a circular economy, diverting waste from landfills to use for power generation and replacing fossil fuels, while recovering metals and reducing emissions. The B&W Environmental segment focuses on systems for cooling, ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control, and mercury control. The B&W Thermal segment offers steam generation equipment, aftermarket parts, construction, maintenance, and field services for plants in the power generation, oil and gas, and industrial sectors. The company was founded by George H. Babcock, Stephen Wilcox, Jr., and Joseph P. Manton in 1856 and is headquartered in Akron, OH.
About Solid Power
Solid Power, Inc. develops solid state battery technologies for the electric vehicles (EV) and other markets in the United States. The company sells its sulfide-based solid electrolyte; and licenses its solid-state cell designs and manufacturing processes. It also produces and sells 0.2, 2, 20 ampere-hour (Ah), and EV cells. Solid Power, Inc. was founded in 2011 and is headquartered in Louisville, Colorado.