Contrasting Nextera Energy Partners (NYSE:NEP) and Fortis (NYSE:FTS)

Nextera Energy Partners (NYSE:NEP) and Fortis (NYSE:FTS) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Dividends

Nextera Energy Partners pays an annual dividend of $3.67 per share. Fortis pays an annual dividend of $1.70 per share and has a dividend yield of 3.8%. Nextera Energy Partners pays out -3,670.0% of its earnings in the form of a dividend. Fortis pays out 72.0% 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.

Profitability

This table compares Nextera Energy Partners and Fortis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nextera Energy Partners	-0.73%	1.34%	0.85%
Fortis	14.12%	7.09%	2.34%

Volatility and Risk

Nextera Energy Partners has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Fortis has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Nextera Energy Partners and Fortis, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nextera Energy Partners	2	0	0	0	1.00
Fortis	2	2	0	0	1.50

Nextera Energy Partners currently has a consensus target price of $10.00, indicating a potential upside of 0.00%. Given Nextera Energy Partners’ higher probable upside, analysts plainly believe Nextera Energy Partners is more favorable than Fortis.

Insider and Institutional Ownership

66.0% of Nextera Energy Partners shares are owned by institutional investors. Comparatively, 57.8% of Fortis shares are owned by institutional investors. 0.1% of Nextera Energy Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Nextera Energy Partners and Fortis”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nextera Energy Partners	$1.23 billion	0.00	-$10.00 million	($0.10)	N/A
Fortis	$11.51 billion	1.95	$1.17 billion	$2.36	19.03

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

Summary

Fortis beats Nextera Energy Partners on 9 of the 14 factors compared between the two stocks.

About Nextera Energy Partners

NextEra Energy Partners LP engages in the acquisition, management, and ownership of contracted clean energy projects with long-term cash flows. It owns interests in wind and solar projects in North America and natural gas infrastructure assets in Texas. The company was founded on March 6, 2014 and is headquartered in Juno Beach, FL.

About Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.