Financial Analysis: Talos Energy (NYSE:TALO) vs. Alto Ingredients (NASDAQ:ALTO)

Alto Ingredients (NASDAQ:ALTO) and Talos Energy (NYSE:TALO) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a summary of current ratings for Alto Ingredients and Talos Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alto Ingredients	0	2	1	0	2.33
Talos Energy	1	3	4	1	2.56

Alto Ingredients presently has a consensus target price of $10.00, suggesting a potential upside of 150.63%. Talos Energy has a consensus target price of $18.50, suggesting a potential upside of 11.83%. Given Alto Ingredients’ higher possible upside, analysts clearly believe Alto Ingredients is more favorable than Talos Energy.

Volatility and Risk

Alto Ingredients has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, Talos Energy has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500.

Earnings and Valuation

This table compares Alto Ingredients and Talos Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alto Ingredients	$917.93 million	0.34	$13.34 million	$0.67	5.96
Talos Energy	$1.78 billion	1.55	-$494.29 million	($2.38)	-6.95

Alto Ingredients has higher earnings, but lower revenue than Talos Energy. Talos Energy is trading at a lower price-to-earnings ratio than Alto Ingredients, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

42.4% of Alto Ingredients shares are owned by institutional investors. Comparatively, 89.3% of Talos Energy shares are owned by institutional investors. 4.3% of Alto Ingredients shares are owned by company insiders. Comparatively, 0.5% of Talos Energy shares are owned 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.

Profitability

This table compares Alto Ingredients and Talos Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alto Ingredients	5.51%	18.54%	11.61%
Talos Energy	-20.46%	-1.94%	-0.75%

Summary

Alto Ingredients beats Talos Energy on 8 of the 15 factors compared between the two stocks.

About Alto Ingredients

Alto Ingredients, Inc. produces, distributes, and markets specialty alcohols, renewable fuel, and essential ingredients in the United States. The company operates in three segments: Marketing and Distribution, Pekin Campus Production, and Western Production. It offers specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants, and cleaners for health, home, and beauty markets; grain neutral spirits used in alcoholic beverages and vinegar, as well as corn germ used in corn oils in the food and beverage markets; alcohols and other products for paint applications and fertilizers in the industrial and agriculture markets; and essential ingredients include dried yeast, corn protein meal, corn protein feed, distiller's grains, and liquid feed for commercial animal feed and pet food applications, as well as yeast for human consumption. The company also provides fuel-grade ethanol used as transportation fuel and distillers corn oil used as a biodiesel feedstock, as well as fuel-grade ethanol produced by third parties. In addition, it offers transportation, storage, and delivery services through third-party service providers. The company sells ethanol to integrated oil companies and gasoline marketers; essential ingredient feed products to dairies and feedlots; and corn oil to poultry, renewable diesel, and biodiesel customers. It operates alcohol production facilities. The company was formerly known as Pacific Ethanol, Inc. and changed its name to Alto Ingredients, Inc. in January 2021. Alto Ingredients, Inc. was founded in 2003 and is headquartered in Pekin, Illinois.

About Talos Energy

Talos Energy Inc., through its subsidiaries, engages in the exploration and production of oil, natural gas, and natural gas liquids in the United States and Mexico. It also engages in the development of carbon capture and sequestration. Talos Energy Inc. was founded in 2011 and is headquartered in Houston, Texas.