AES (NYSE: AES) and Atlantic Power (NYSE:AT) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.
Institutional and Insider Ownership
93.4% of AES shares are held by institutional investors. Comparatively, 49.5% of Atlantic Power shares are held by institutional investors. 1.2% of AES shares are held by company insiders. Comparatively, 1.6% of Atlantic Power shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares AES and Atlantic Power’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
AES pays an annual dividend of $0.52 per share and has a dividend yield of 4.6%. Atlantic Power does not pay a dividend. AES pays out 48.1% of its earnings in the form of a dividend. AES has raised its dividend for 5 consecutive years.
Valuation & Earnings
This table compares AES and Atlantic Power’s top-line revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Atlantic Power has lower revenue, but higher earnings than AES. Atlantic Power is trading at a lower price-to-earnings ratio than AES, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for AES and Atlantic Power, as provided by MarketBeat.
||Strong Buy Ratings
AES presently has a consensus price target of $12.58, indicating a potential upside of 11.46%. Atlantic Power has a consensus price target of $2.50, indicating a potential upside of 13.64%. Given Atlantic Power’s higher probable upside, analysts clearly believe Atlantic Power is more favorable than AES.
Volatility and Risk
AES has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Atlantic Power has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500.
AES beats Atlantic Power on 11 of the 17 factors compared between the two stocks.
AES Company Profile
The AES Corporation is a holding company. The Company, through its subsidiaries and affiliates, operates a diversified portfolio of electricity generation and distribution businesses. It is organized into six strategic business units (SBUs): the United States; Andes; Brazil; Mexico, Central America and the Caribbean (MCAC); Europe, and Asia. As of December 31, 2016, its United States SBU had 18 generation facilities and two integrated utilities in the United States. As of December 31, 2016, its Andes SBU had generation facilities in three countries. Its Brazil SBU has generation and distribution businesses, Eletropaulo and Tiete. As of December 31, 2016, its MCAC SBU had a portfolio of distribution businesses and generation facilities, including renewable energy, in five countries. As of December 31, 2016, its Europe SBU had generation facilities in five countries. As of December 31, 2016, its Asia SBU had generation facilities in three countries.
Atlantic Power Company Profile
Atlantic Power Corporation owns and operates a fleet of power generation assets in the United States and Canada. As of December 31, 2017, its power generation projects had an aggregate gross electric generation capacity of approximately 1,633 megawatts consisting of interests in 18 operational power generation projects across 9 states in the United States and 2 provinces in Canada. The company sells its electricity to utilities and other customers. Atlantic Power Corporation was founded in 2004 and is headquartered in Dedham, Massachusetts.
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