NRG Yield (NYLD) and Its Competitors Critical Analysis

NRG Yield (NYSE: NYLD) is one of 85 publicly-traded companies in the “Electric Utilities” industry, but how does it contrast to its competitors? We will compare NRG Yield to similar companies based on the strength of its dividends, institutional ownership, analyst recommendations, profitability, earnings, valuation and risk.

Valuation and Earnings

This table compares NRG Yield and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
NRG Yield $1.01 billion $753.00 million 42.11
NRG Yield Competitors $7.19 billion $2.12 billion 30.57

NRG Yield’s competitors have higher revenue and earnings than NRG Yield. NRG Yield is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

NRG Yield has a beta of 2.57, indicating that its stock price is 157% more volatile than the S&P 500. Comparatively, NRG Yield’s competitors have a beta of 0.70, indicating that their average stock price is 30% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for NRG Yield and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NRG Yield 0 5 4 0 2.44
NRG Yield Competitors 508 2877 2323 41 2.33

NRG Yield currently has a consensus price target of $19.83, indicating a potential upside of 4.66%. As a group, “Electric Utilities” companies have a potential upside of 6.31%. Given NRG Yield’s competitors higher probable upside, analysts plainly believe NRG Yield has less favorable growth aspects than its competitors.

Institutional and Insider Ownership

28.3% of NRG Yield shares are held by institutional investors. Comparatively, 65.5% of shares of all “Electric Utilities” companies are held by institutional investors. 0.2% of NRG Yield shares are held by company insiders. Comparatively, 2.7% of shares of all “Electric Utilities” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares NRG Yield and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NRG Yield 4.47% 1.89% 0.53%
NRG Yield Competitors -10.82% 3.51% 0.54%

Dividends

NRG Yield pays an annual dividend of $1.12 per share and has a dividend yield of 5.9%. NRG Yield pays out 248.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Electric Utilities” companies pay a dividend yield of 3.2% and pay out 103.7% of their earnings in the form of a dividend.

Summary

NRG Yield competitors beat NRG Yield on 9 of the 15 factors compared.

About NRG Yield

NRG Yield, Inc. serves as the primary vehicle, through which NRG Energy, Inc. owns, operates and acquires contracted renewable and conventional generation and thermal infrastructure assets. It owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States. Its contracted generation portfolio includes three natural gas or dual-fired facilities, eight utility-scale solar and wind generation facilities and two portfolios of distributed solar facilities that collectively represent 1,324 net megawatt. The Company also own thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,098 net megawatt and electric generation capacity of 123 net megawatt. In July 2014, NRG Yield Inc completed its acquisition of three Right of First Offer (ROFO) assets from NRG Energy, Inc. In August 2014, it acquired Alta Wind facility located in Tehachapi, California from Terra-Gen Power LLC.

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