Reviewing Huaneng Power International (HNP) & SSE PLC/S (SSEZY)

Huaneng Power International (NYSE: HNP) and SSE PLC/S (OTCMKTS:SSEZY) are both large-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility & Risk

Huaneng Power International has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, SSE PLC/S has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Valuation and Earnings

This table compares Huaneng Power International and SSE PLC/S’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Huaneng Power International $22.56 billion 0.44 $233.81 million $0.40 64.75
SSE PLC/S $35.96 billion 0.50 $2.09 billion $1.56 11.44

SSE PLC/S has higher revenue and earnings than Huaneng Power International. SSE PLC/S is trading at a lower price-to-earnings ratio than Huaneng Power International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Huaneng Power International and SSE PLC/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Huaneng Power International 1.03% 1.66% 0.43%
SSE PLC/S N/A N/A N/A

Institutional and Insider Ownership

0.5% of Huaneng Power International shares are held by institutional investors. Comparatively, 0.3% of SSE PLC/S shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Huaneng Power International pays an annual dividend of $0.55 per share and has a dividend yield of 2.1%. SSE PLC/S pays an annual dividend of $1.22 per share and has a dividend yield of 6.8%. Huaneng Power International pays out 137.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SSE PLC/S pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SSE PLC/S is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations and price targets for Huaneng Power International and SSE PLC/S, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Huaneng Power International 0 1 2 0 2.67
SSE PLC/S 0 1 1 0 2.50

Huaneng Power International Company Profile

Huaneng Power International, Inc., through its subsidiaries, generates and sells electricity and heat to the regional or provincial grid companies in the People's Republic of China and Singapore. It is involved in the development, investment, construction, operation, and management of power plants and related projects; and generation, wholesale, and retail of power and other relating utilities. The company generates power from coal, wind, gas, oil, biomass, solar, and hydro resources. It is also involved in the sale of coal ash and lime; provision of loading warehousing and conveying services; photovoltaic power generation projects development and construction; and provision of thermal energy and cold energy services, as well as thermal heating services. In addition, the company engages in the repair of power equipment; provision of water supply and transportation services; construction and operation of electricity distribution networks and heating pipe networks; power supply, energy transmission, and substation project contracting activities; cargo transportation along domestic coastal areas; port management, investment, and development activities; and port provision, and cargo loading and storage activities. Further, it is involved in the aquaculture and agriculture irrigation activities, as well as provides environment engineering, waste recycling consultancy, and industrial waste management and recycling services. Additionally, it sells raw and processed coal; and provides central heat, and plumbing and pipe installation services, as well as desalinated water. As of March 31, 2018, the company had controlled generating capacity of 104,301 megawatts and a total generating capacity of 91,783 megawatts. Huaneng Power International, Inc. was founded in 1994 and is headquartered in Beijing, the People's Republic of China.

SSE PLC/S Company Profile

SSE plc produces, generates, distributes, and supplies electricity and gas, as well as other energy-related services in the United Kingdom and Ireland. It operates through three segments: Wholesale, Networks, and Retail. The company generates electricity from gas, oil, coal, water, and wind. Its electricity networks transmit and distribute electricity to approximately 3.7 million businesses, offices, and homes through approximately 130,000 kilometers of overhead lines and underground cables; and gas networks distribute gas to approximately 5.7 million homes, offices, and businesses through 75,000 kilometers of gas mains. The company also supplies electricity and gas to approximately 9 million households and businesses under the SSE, Scottish Hydro, Southern Electric, SWALEC, Atlantic, and Airtricity brands. In addition, it maintains and replaces street and highway lighting; designs, builds, owns, and operates networks for electricity, gas, water, and heat; and provides network capacity, bandwidth, and data center services. Further, the company offers energy-related products and services, including home services, such as gas boiler covers, central heating and wiring maintenance and installation, telephone line rental, and calls and broadband services; and supplying, installing, maintaining, and reading meters in the household, commercial, industrial, and generation sectors. The company was formerly known as Scottish and Southern Energy plc and changed its name to SSE plc in September 2011. SSE plc was incorporated in 1989 and is based in Perth, the United Kingdom.

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