What is the Best Geothermal Stock? HTM, ORA & CPN

Yesterday, small cap geothermal stock U.S. Geothermal Inc (NYSEMKT: HTM) produced a geyser of a return when it surged 26.79%, meaning its worth taking a closer look at the stock verses the performance of other geothermal stocks like small cap Ormat Technologies, Inc (NYSE: ORA) and mid cap Calpine Corporation (NYSE: CPN). First of all, I should mention there are some other geothermal stocks out there like Alterra Power Corp (CVE: AXY) and Ram Power Corp (TSE: RPG) who have their primary listing on Canadian exchanges with secondary ones on the OTC – meaning they may not be a good deal for American investors or easy to invest in. Second, U.S. Geothermal Inc itself is a good geothermal proxy as its focused on developing, owning, and operating clean, sustainable electric power from geothermal energy resources and its operating geothermal power projects at Neal Hot Springs, Oregon; San Emidio, Nevada; and Raft River, Idaho plus El Ceibillo, an advanced stage, geothermal prospect located within a 24,710 acre energy rights concession area near Guatemala City, the largest city in Central America.

In addition, there are some other good articles (U.S. Geothermal: When Opportunity Knocks.... (HTM) and U.S. Geothermal is a "Buy"... For the Right Kind of Investor (HTM)) about U.S. Geothermal Inc that were just published on our site. So I won't recover the same territory and there appears to be no news to explain yesterday's jump.

However, I should also mention that in the past, my major complaint about U.S. Geothermal Inc concerned some of the subsidies or special loans it was getting courtesy of US taxpayers. Moreover, U.S. Geothermal Inc has reported revenues of $5,894k (year ended March 31, 2012), $3,254k (year ended March 31, 2011) and $2,579k (year ended March 31, 2010) for the past three reported fiscal years along with net losses of $6,222k (year ended March 31, 2012), $3,954k (year ended March 31, 2011) and $5,839k (year ended March 31, 2010). However, U.S. Geothermal Inc did announce on Monday that Oregon USG Holdings LLC had made its first distribution of profits from the Neal Hot Springs project with that share being $4.6 million out of a total distribution to the partners of $7.7 million. This represents profits generated from the project since initial operation began in November 2012. On Thursday, U.S. Geothermal Inc surged 26.79% to $0.71 (HTM has a 52 week trading range of $0.26 to $0.74 a share) for a market cap of $57.17 million plus the stock is up 108.8% over the past year and down 18.4% over the past five years.

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With U.S. Geothermal Inc in mind, here is a look at the two other geothermal stocks:

Ormat Technologies, Inc. A leading vertically integrated company dedicated to providing solutions for geothermal power, recovered energy generation (REG) and remote power, Israel based Ormat Technologies has over four decades of experience in the development of state-of-the-art, environmentally sound power solutions, primarily in geothermal and recovered energy generation. More specifically, Ormat Technologies designs, develops, builds, owns and operates geothermal energy and recovered energy-based power plants in the United States and other countries plus designs, manufactures and sells power units and other power generating equipment for geothermal power plants and recovered energy-based electricity generation. In late February, Ormat Technologies reported a 6.3% revenue increase to to $533.2 million, including record revenues in the product segment which increased 8.9% increase to $203.5 million. Net income came in at $41.2 million verses a net loss of $213.0 million for 2012 due to an impairment charge of $236.4 million. The CEO noted:

"We expect our 2014 electricity revenues to be between $370 million and $380 million and our product segment revenues to be between $170 million and $180 million, including $36 million revenue from the Sarulla project."

It should also be mentioned that Ormat Technologies has appointed Mr. Isaac Angel as CEO who will join the company on April 1 and assume the CEO position effective July 1. On Thursday, small cap Ormat Technologies rose 0.10% to $28.90 (ORA has a 52 week trading range of $19.55 to $29.22 a share) for a market cap of $1.31 billion plus the stock is up 38.3% over the past year and up 13.78% over the past five years.

Calpine Corporation. A major US power company, capable of delivering more than 29,000 megawatts of clean, reliable and fuel-efficient electricity to customers and communities in 20 US states and Canada, Calpine Corporation develops, constructs, owns and operates a modern and flexible fleet of low-carbon, natural gas-fired and renewable geothermal power plants. On the geothermal side of things, Calpine Corporation operates 15 geothermal power plants at The Geysers region of Northern California, generating up to 725 megawatts of renewable "green" power or about 40% of the geothermal energy in the United States - making Calpine the largest producer of geothermal energy in North America. However, investors with a long memory may remember that Calpine Corporation emerged from bankruptcy on January 31, 2008. Moreover, geothermal energy is not necessarily a major focus for Calpine Corporation as it recently announced the acquisition of a natural gas-fired power plant from MinnTex Power Holdings LLC for $625 million. The CEO noted:

"We strongly believe in the potential of the Texas market as electric demand increases and reserve margins tighten." 

On Thursday, mid cap Calpine Corporation rose 1.69% to $20.44 (CPN has a 52 week trading range of $18.46 to $22.16 a share) for a market cap of $8.65 billion plus the stock is up 2.6% over the past year and up 223.4% over the past five years.

Finally, here is a look at the share performance of all three small cap or mid cap geothermal stocks: 

As you can see from the above share performance chart, Calpine Corporation has been a much better performer over the long term while U.S. Geothermal Inc and Ormat Technologies have been underperformers.