Reviewing Entergy (ETR) & 8Point3 Energy Partners (CAFD)

Entergy (NYSE: ETR) and 8Point3 Energy Partners (NASDAQ:CAFD) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares Entergy and 8Point3 Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Entergy 4.21% 16.19% 2.87%
8Point3 Energy Partners 28.84% 1.96% 1.01%

Earnings and Valuation

This table compares Entergy and 8Point3 Energy Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Entergy $11.07 billion 1.32 $425.35 million $7.20 11.22
8Point3 Energy Partners $70.08 million 14.02 $11.40 million N/A N/A

Entergy has higher revenue and earnings than 8Point3 Energy Partners.

Dividends

Entergy pays an annual dividend of $3.56 per share and has a dividend yield of 4.4%. 8Point3 Energy Partners pays an annual dividend of $1.12 per share and has a dividend yield of 9.0%. Entergy pays out 49.4% of its earnings in the form of a dividend. Entergy has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations for Entergy and 8Point3 Energy Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Entergy 0 5 6 0 2.55
8Point3 Energy Partners 2 10 0 0 1.83

Entergy currently has a consensus price target of $84.95, suggesting a potential upside of 5.15%. 8Point3 Energy Partners has a consensus price target of $13.06, suggesting a potential upside of 5.12%. Given Entergy’s stronger consensus rating and higher probable upside, research analysts plainly believe Entergy is more favorable than 8Point3 Energy Partners.

Volatility & Risk

Entergy has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, 8Point3 Energy Partners has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Institutional & Insider Ownership

85.7% of Entergy shares are held by institutional investors. Comparatively, 12.7% of 8Point3 Energy Partners shares are held by institutional investors. 0.2% of Entergy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Entergy beats 8Point3 Energy Partners on 10 of the 15 factors compared between the two stocks.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and distribution of electricity in the United States. It generates electricity through gas/oil, nuclear, coal, hydro, and solar power sources. The company's Utility segment generates, transmits, distributes, and sells electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and distributes natural gas. Its Entergy Wholesale Commodities segment engages in the ownership, operation, and decommissioning of nuclear power plants located in the northern United States; sale of electric power to wholesale customers; provision of services to other nuclear power plant owners; and owning interests in non-nuclear power plants that sell electric power to wholesale customers. This segment sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company's power plants have approximately 30,000 megawatts (MW) of electric generating capacity, including approximately 9,000 MW of nuclear power. The company delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1949 and is based in New Orleans, Louisiana.

About 8Point3 Energy Partners

8point3 Energy Partners LP, together with its subsidiaries, acquires, owns, and operates solar energy generation projects in the United States. It owns interests in 10 utility-scale solar energy projects; and 4 commercial and industrial solar energy projects, as well as a portfolio of residential DG solar assets. As of November 30, 2017, its portfolio consisted of interests in 946 megawatt of solar energy projects. 8point3 General Partner, LLC serves as the general partner of the company. The company was founded in 2015 and is based in San Jose, California.

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