Critical Review: NorthWestern (NWE) & Enel Americas (ENIA)

NorthWestern (NYSE: NWE) and Enel Americas (NYSE:ENIA) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Dividends

NorthWestern pays an annual dividend of $2.10 per share and has a dividend yield of 4.0%. Enel Americas pays an annual dividend of $0.20 per share and has a dividend yield of 1.8%. NorthWestern pays out 62.9% of its earnings in the form of a dividend. NorthWestern has increased its dividend for 9 consecutive years. NorthWestern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for NorthWestern and Enel Americas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NorthWestern 3 2 0 0 1.40
Enel Americas 0 0 2 0 3.00

NorthWestern presently has a consensus target price of $54.75, suggesting a potential upside of 4.74%. Given NorthWestern’s higher possible upside, equities analysts plainly believe NorthWestern is more favorable than Enel Americas.

Insider and Institutional Ownership

93.0% of NorthWestern shares are owned by institutional investors. Comparatively, 8.6% of Enel Americas shares are owned by institutional investors. 1.3% of NorthWestern shares are owned by insiders. Comparatively, 0.0% of Enel Americas shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

NorthWestern has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500. Comparatively, Enel Americas has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares NorthWestern and Enel Americas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NorthWestern 12.46% 9.33% 2.93%
Enel Americas N/A N/A N/A

Earnings and Valuation

This table compares NorthWestern and Enel Americas’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NorthWestern $1.31 billion 1.98 $162.70 million $3.34 15.65
Enel Americas $7.76 billion 1.69 $497.97 million N/A N/A

Enel Americas has higher revenue and earnings than NorthWestern.

Summary

NorthWestern beats Enel Americas on 9 of the 15 factors compared between the two stocks.

About NorthWestern

NorthWestern Corporation, doing business as North-Western Energy, provides electricity and natural gas. The Company’s segments are Electric operations, Natural gas operations and All other. As of December 31, 2016, the Company provided electricity and natural gas to approximately 709,600 customers in Montana, South Dakota and Nebraska. It generates and distributes electricity in South Dakota; distributes natural gas in South Dakota and Nebraska, and generates and distributes electricity and distributes natural gas in Montana. Its regulated electric utility business in Montana includes generation, transmission and distribution. As of December 31, 2016, it provided retail electricity in 110 communities in South Dakota. Its regulated natural gas utility business in Montana includes production, storage, transmission and distribution. As of December 31, 2016, it provided natural gas to approximately 88,500 customers in 60 South Dakota communities and four Nebraska communities.

About Enel Americas

Enel Americas S.A., formerly Enersis Americas S.A., through its subsidiaries and jointly controlled entities, is engaged in the electricity generation, transmission and distribution businesses in Chile, Brazil, Colombia, Peru and Argentina. The Company operates through two segments: Generation and Transmission, and Distribution. The Company’s Generation and Transmission segment operates through companies, including Central Comercializadora de Energia S.A. (Cemsa); Central Dock Sud S.A. (Dock Sud); Central Costanera S.A. (Costanera), and Hidroelectrica El Chocon S.A. (El Chocon). The Company’s Distribution segment operates through companies, including Empresa Distribuidora Sur S.A. (Edesur); Ampla Energia e Servicos S.A. (Ampla), and Companhia Energetica do Ceara S.A. (Coelce). The Company is engaged in non-electricity business through its subsidiary, Servicios Informaticos e Inmobiliarios Ltda. (SIEI). It holds interest in Yacylec S.A., which is an electricity transmission company.

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