Eversource Energy (NYSE:ES) vs. Atlantica Yield (AY) Financial Contrast

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Atlantica Yield (NASDAQ: AY) and Eversource Energy (NYSE:ES) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Volatility and Risk

Atlantica Yield has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Earnings and Valuation

This table compares Atlantica Yield and Eversource Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantica Yield $1.01 billion 2.02 -$111.80 million ($0.18) -112.67
Eversource Energy $7.75 billion 2.46 $987.99 million $3.11 19.32

Eversource Energy has higher revenue and earnings than Atlantica Yield. Atlantica Yield is trading at a lower price-to-earnings ratio than Eversource Energy, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

51.7% of Atlantica Yield shares are owned by institutional investors. Comparatively, 73.8% of Eversource Energy shares are owned by institutional investors. 0.5% of Eversource Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Atlantica Yield and Eversource Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield -10.12% -0.52% -0.10%
Eversource Energy 12.58% 9.04% 2.87%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Atlantica Yield and Eversource Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield 0 0 4 0 3.00
Eversource Energy 1 4 7 0 2.50

Atlantica Yield currently has a consensus target price of $25.25, indicating a potential upside of 24.51%. Eversource Energy has a consensus target price of $62.68, indicating a potential upside of 4.33%. Given Atlantica Yield’s stronger consensus rating and higher probable upside, analysts plainly believe Atlantica Yield is more favorable than Eversource Energy.

Dividends

Atlantica Yield pays an annual dividend of $1.28 per share and has a dividend yield of 6.3%. Eversource Energy pays an annual dividend of $2.02 per share and has a dividend yield of 3.4%. Atlantica Yield pays out -711.1% of its earnings in the form of a dividend. Eversource Energy pays out 65.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Eversource Energy has increased its dividend for 2 consecutive years. Atlantica Yield is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Eversource Energy beats Atlantica Yield on 12 of the 17 factors compared between the two stocks.

About Atlantica Yield

Atlantica Yield plc acquires, owns, and manages renewable energy natural gas, power, electric transmission lines, and water assets in North America, South America, Spain, Algeria, and South Africa. As of December 31, 2017, it had 22 assets, including 1,446 megawatts (MW) of renewable energy generation assets comprising solar power and wind plants; 300 MW of natural gas power generation assets that produce electricity and steam from natural gas; 1,099 miles of electric transmission lines; and desalination plants with an aggregate capacity of 10.5 million cubic feet per day. The company was formerly known as Abengoa Yield plc and changed its name to Atlantica Yield plc in May 2016. Atlantica Yield plc was incorporated in 2013 and is based in Brentford, the United Kingdom.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates in three segments: Electric Distribution, Electric Transmission, and Natural Gas Distribution. It is involved in the transmission and distribution of electricity; and distribution of natural gas. The company operates water regulated utilities. It also provides water services to approximately 226,000 customers. It serves residential, commercial, industrial, municipal, fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire, the United States. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was founded in 1927 and is based in Springfield, Massachusetts.

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