Critical Comparison: Pacific Ethanol (PEIX) and Aemetis (AMTX)

Pacific Ethanol (NASDAQ: PEIX) and Aemetis (NASDAQ:AMTX) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Analyst Ratings

This is a summary of current ratings for Pacific Ethanol and Aemetis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Ethanol 0 0 4 0 3.00
Aemetis 0 2 0 0 2.00

Pacific Ethanol presently has a consensus price target of $11.50, indicating a potential upside of 164.37%. Aemetis has a consensus price target of $2.00, indicating a potential upside of 189.86%. Given Aemetis’ higher possible upside, analysts clearly believe Aemetis is more favorable than Pacific Ethanol.

Risk & Volatility

Pacific Ethanol has a beta of 2.07, suggesting that its share price is 107% more volatile than the S&P 500. Comparatively, Aemetis has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Institutional & Insider Ownership

80.5% of Pacific Ethanol shares are held by institutional investors. Comparatively, 25.7% of Aemetis shares are held by institutional investors. 3.9% of Pacific Ethanol shares are held by company insiders. Comparatively, 24.1% of Aemetis shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Pacific Ethanol and Aemetis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Ethanol -0.51% -2.13% -1.23%
Aemetis -15.79% N/A -31.90%

Valuation and Earnings

This table compares Pacific Ethanol and Aemetis’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Ethanol $1.62 billion 0.12 $1.41 million ($0.24) -18.12
Aemetis $143.16 million 0.10 -$15.63 million ($1.01) -0.68

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

Summary

Pacific Ethanol beats Aemetis on 10 of the 13 factors compared between the two stocks.

Pacific Ethanol Company Profile

Pacific Ethanol, Inc. (Pacific Ethanol) is a marketer and producer of low-carbon renewable fuels in the Western United States. Pacific Ethanol markets all the ethanol produced by four ethanol production facilities located in California, Idaho and Oregon, or the Pacific Ethanol Plants, all the ethanol produced by three other ethanol producers in the Western United States and ethanol purchased from other third-party suppliers throughout the United States. It also markets ethanol co-products, including wet distiller’s grains and syrup (WDG), for the Pacific Ethanol Plants. Its 83% ownership interest in New PE Holdco LLC, the owner of each of the plant holding companies, that collectively own the Pacific Ethanol Plants. Its ethanol customers are integrated oil companies and gasoline marketers who blend ethanol into gasoline. Effective September 02, 2014, Pacific Ethanol Inc raised its interest to 96% from 91%, by acquiring a 5% interest, in PE Op Co.

Aemetis Company Profile

Aemetis, Inc. is an international renewable fuels and biochemicals company. The Company is focused on the production of fuels and chemicals through the acquisition, development and commercialization of technologies that replace traditional petroleum-based products by conversion of first-generation ethanol and biodiesel plants into biorefineries. Its segments include North America and India. The North America segment includes the Company’s approximately 60 million gallon per year capacity ethanol manufacturing plant in Keyes, California and its technology lab in College Park, Maryland. The India segment includes the Company’s over 50 million gallon per year capacity biodiesel manufacturing plant in Kakinada, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Keyes plant produces denatured ethanol, Wet Distillers Grains, corn oil and Condensed Distillers Solubles. It produces biodiesel and refined glycerin at the Kakinada plant.

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