Head-To-Head Survey: China BAK Battery (NASDAQ:CBAT) & Babcock (NYSE:BW)

Babcock (NYSE:BW) and China BAK Battery (NASDAQ:CBAT) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Risk and Volatility

Babcock has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, China BAK Battery has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500.

Earnings & Valuation

This table compares Babcock and China BAK Battery”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Babcock	$717.30 million	0.13	-$59.92 million	($0.83)	-1.17
China BAK Battery	$176.62 million	0.59	$11.79 million	$0.13	8.88

China BAK Battery has lower revenue, but higher earnings than Babcock. Babcock is trading at a lower price-to-earnings ratio than China BAK Battery, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

83.2% of Babcock shares are held by institutional investors. Comparatively, 2.0% of China BAK Battery shares are held by institutional investors. 3.9% of Babcock shares are held by company insiders. Comparatively, 13.0% of China BAK Battery shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Babcock and China BAK Battery, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Babcock	0	2	1	0	2.33
China BAK Battery	0	0	0	0	0.00

Babcock presently has a consensus price target of $2.67, indicating a potential upside of 174.07%. Given Babcock’s stronger consensus rating and higher probable upside, research analysts clearly believe Babcock is more favorable than China BAK Battery.

Profitability

This table compares Babcock and China BAK Battery’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Babcock	-7.89%	N/A	-7.84%
China BAK Battery	0.25%	0.30%	0.13%

Summary

China BAK Battery beats Babcock 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 China BAK Battery

CBAK Energy Technology, Inc., together with its subsidiaries, manufacture, commercialization, and distribution of lithium ion high power rechargeable batteries in Mainland China, the United States, Europe, and internationally. The company operates in two segments, CBAK and Hitrans. Its lithium batteries are used in various applications, including electric vehicles, such as electric cars, electric buses, and hybrid electric cars and buses; light electric vehicles, such as electric bicycles, electric motors, electric tricycles, and smaller-sized electric cars; and electric tools, energy storage, uninterruptible power supply, and other high power applications, as well as cordless power tools. The company also develops and manufactures NCM precursor and cathode materials. The company was formerly known as China BAK Battery, Inc. and changed its name to CBAK Energy Technology, Inc. in January 2017. CBAK Energy Technology, Inc. is based in Dalian, China.