Critical Review: Ares Acquisition (NYSE:AAC) versus NuScale Power (NYSE:SMR)

Ares Acquisition (NYSE:AAC) and NuScale Power (NYSE:SMR) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Insider and Institutional Ownership

63.1% of Ares Acquisition shares are held by institutional investors. Comparatively, 10.7% of NuScale Power shares are held by institutional investors. 0.2% of Ares Acquisition shares are held by insiders. Comparatively, 3.1% of NuScale Power shares are held 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 Ares Acquisition and NuScale Power’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ares Acquisition	N/A	N/A	$20.98 million	N/A	N/A
NuScale Power	$17.91 million	76.78	-$57.07 million	($0.66)	-9.09

Ares Acquisition has higher earnings, but lower revenue than NuScale Power.

Profitability

This table compares Ares Acquisition and NuScale Power’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ares Acquisition	N/A	-41.82%	-1.34%
NuScale Power	-654.97%	-43.96%	-33.64%

Analyst Ratings

This is a breakdown of current ratings and price targets for Ares Acquisition and NuScale Power, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ares Acquisition	0	0	0	0	N/A
NuScale Power	0	2	1	0	2.33

NuScale Power has a consensus target price of $12.17, suggesting a potential upside of 102.78%. Given NuScale Power’s higher possible upside, analysts plainly believe NuScale Power is more favorable than Ares Acquisition.

Risk & Volatility

Ares Acquisition has a beta of 0.01, meaning that its stock price is 99% less volatile than the S&P 500. Comparatively, NuScale Power has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

About Ares Acquisition

Ares Acquisition Corporation does not have significant operations. The company intends to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. Ares Acquisition Corporation was incorporated in 2020 and is based in New York, New York.

About NuScale Power

NuScale Power Corporation engages in the development and sale of modular light water reactor nuclear power plants to supply energy for electrical generation, district heating, desalination, hydrogen production, and other process heat applications. It offers NuScale Power Module (NPM), a water reactor that can generate 77 megawatts of electricity (MWe); and VOYGR power plant designs for three facility sizes that are capable of housing from one to four and six or twelve NPMs. NuScale Power Corporation was founded in 2007 and is headquartered in Portland, Oregon. NuScale Power Corporation operates as a subsidiary of Fluor Enterprises, Inc.