Analyzing Acuity (NYSE:AYI) and Shoals Technologies Group (NASDAQ:SHLS)

Acuity (NYSE:AYI) and Shoals Technologies Group (NASDAQ:SHLS) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.

Profitability

This table compares Acuity and Shoals Technologies Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acuity	10.25%	20.26%	12.21%
Shoals Technologies Group	5.41%	10.07%	6.38%

Insider and Institutional Ownership

98.2% of Acuity shares are owned by institutional investors. 2.9% of Acuity shares are owned by insiders. Comparatively, 0.8% of Shoals Technologies Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Acuity has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Shoals Technologies Group has a beta of 1.89, indicating that its stock price is 89% more volatile than the S&P 500.

Earnings & Valuation

This table compares Acuity and Shoals Technologies Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acuity	$4.61 billion	1.97	$396.60 million	$15.08	20.08
Shoals Technologies Group	$588.06 million	2.18	$33.57 million	$0.19	40.00

Acuity has higher revenue and earnings than Shoals Technologies Group. Acuity is trading at a lower price-to-earnings ratio than Shoals Technologies Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Acuity and Shoals Technologies Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity	0	4	5	0	2.56
Shoals Technologies Group	0	6	11	0	2.65

Acuity currently has a consensus price target of $397.17, indicating a potential upside of 31.16%. Shoals Technologies Group has a consensus price target of $10.71, indicating a potential upside of 40.98%. Given Shoals Technologies Group’s stronger consensus rating and higher probable upside, analysts plainly believe Shoals Technologies Group is more favorable than Acuity.

Summary

Acuity beats Shoals Technologies Group on 8 of the 14 factors compared between the two stocks.

About Acuity

Acuity Brands, Inc. provides lighting, lighting controls, building management system, location-aware applications in the United States and internationally. The company operates in two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the A-Light, Aculux, American Electric Lighting, Cyclone, Dark to Light, eldoLED, Eureka, Gotham, Healthcare Lighting, Holophane, Hydrel, Indy, IOTA, Juno, Lithonia Lighting, Luminaire LED, Luminis, Mark Architectural Lighting, nLight, OPTOTRONIC, Peerless, RELOCWiring Solutions, and Sensor Switch. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturers, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management solutions, such as products for controlling heating, ventilation, air conditioning, lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems; and building management software that enhances building system management and automates labor intensive tasks. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. The company offers its products and solutions under the Atrius, Distech Controls, and KE2 Therm Solutions brands. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.

About Shoals Technologies Group

Shoals Technologies Group, Inc. provides electrical balance of system (EBOS) solutions and components for solar, battery energy, and electric vehicle (EV) charging applications in the United States and internationally. The company designs, manufactures, and sells system solutions for both homerun and combine-as-you-go wiring architectures, as well as offers technical support services. It provides EBOS components, including combiners; plug-n-play branch connectors and inline fuses; AC disconnects; recombiners; wireless monitoring; junction boxes; wire management; EV power cabinets; and battery energy storage systems cabinets, as well as cable assemblies, transition enclosures, and splice boxes. In addition, the company offers eMobility solutions, such as a power center, which combines equipment needed to protect the charging equipment and transform voltage levels from the electric utility to those needed on the respective site; quick connect solutions for chargers to connect to the Shoals system; big lead assembly (BLA) technology in the EV space to connect multiple chargers to a single power center; and a raceway system that protects the above ground EV BLAs in walk over and drive over applications. Further, it provides Snapshot IV, a solar operations and maintenance solution that monitors the specific voltage and current of individual solar panels and compares the results against the manufacturer's projected performance. The company sells its products to engineering, procurement, and construction firms that build solar energy projects; utilities; solar developers, independent power producers; solar module manufacturers; and charge point operators. Shoals Technologies Group, Inc. was founded in 1996 and is headquartered in Portland, Tennessee.