TransAlta (NYSE:TAC) and Companhia Paranaense de Energia – COPEL (OTCMKTS:ELPVY) Financial Analysis

TransAlta (NYSE:TAC) and Companhia Paranaense de Energia – COPEL (OTCMKTS:ELPVY) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for TransAlta and Companhia Paranaense de Energia – COPEL, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TransAlta	0	2	0	1	2.67
Companhia Paranaense de Energia – COPEL	0	0	0	0	0.00

TransAlta currently has a consensus price target of $19.50, suggesting a potential upside of 139.12%. Given TransAlta’s stronger consensus rating and higher probable upside, equities research analysts clearly believe TransAlta is more favorable than Companhia Paranaense de Energia – COPEL.

Profitability

This table compares TransAlta and Companhia Paranaense de Energia – COPEL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransAlta	6.38%	18.47%	2.09%
Companhia Paranaense de Energia – COPEL	18.43%	16.92%	7.73%

Dividends

TransAlta pays an annual dividend of $0.18 per share and has a dividend yield of 2.2%. Companhia Paranaense de Energia – COPEL pays an annual dividend of $0.01 per share and has a dividend yield of 0.8%. TransAlta pays out 43.9% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares TransAlta and Companhia Paranaense de Energia – COPEL”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TransAlta	$2.85 billion	0.85	$514.86 million	$0.41	19.89
Companhia Paranaense de Energia – COPEL	$3.95 billion	0.90	$504.25 million	N/A	N/A

TransAlta has higher earnings, but lower revenue than Companhia Paranaense de Energia – COPEL.

Volatility & Risk

TransAlta has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Companhia Paranaense de Energia – COPEL has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500.

Insider & Institutional Ownership

59.0% of TransAlta shares are owned by institutional investors. 13.1% of TransAlta shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

TransAlta beats Companhia Paranaense de Energia – COPEL on 10 of the 15 factors compared between the two stocks.

About TransAlta

TransAlta Corporation engages in the development, production, and sale of electric energy. It operates through Hydro, Wind and Solar, Gas, Energy Transition, and Energy Marketing segments. The Hydro segment holds interest of approximately 922 megawatts (MW) of owned hydroelectric generating capacity located in Alberta, British Columbia, and Ontario. The Wind and Solar segment has a net ownership interest of approximately 2,057 MW of owned wind and solar electrical-generating capacity, as well as battery storage facilities located in Alberta, Ontario, New Brunswick, and Québec in Canada; the states of Massachusetts, Minnesota, New Hampshire, North Carolina, Pennsylvania, Washington, and Wyoming in the United States; and the state of Western Australia. The Gas segment has a net ownership interest of approximately 2,775 MW of owned gas electrical-generating capacity, and facilities located in Alberta, Ontario, Michigan, and the state of Western Australia. The Energy Transition segment has a net ownership interest of approximately 671 MW of owned coal electrical-generating capacity, as well as operates the Skookumchuck hydro facility in Centralia; and engages in the highvale mine and the mine reclamation activities. The Energy Marketing segment is involved in the trading of power, natural gas, and environmental products. It serves customers in various industry segments, including commercial real estate, municipal, manufacturing, industrial, hospitality, finance, and oil and gas. TransAlta Corporation was founded in 1909 and is headquartered in Calgary, Canada.

About Companhia Paranaense de Energia – COPEL

Companhia Paranaense de Energia – COPEL engages in the generation, transmission, distribution, and sale of electricity to industrial, residential, commercial, rural, and other customers primarily in the State of Paraná, Brazil. As of December 31, 2019, the company operated 19 hydroelectric plants, 25 wind plants, and one thermoelectric plant with a total installed capacity of 5,742.0 megawatts; and owned and operated 3,389 kilometers of transmission lines and 199,952.6 kilometers of distribution lines. It holds concessions to distribute electricity in 399 municipalities in the State of Paraná and in the municipality of Porto União in the State of Santa Catarina. The company also provides telecommunication services to corporate clients, including supermarkets, universities, banks, internet service providers, and television networks, as well as to retail clients; and broadband internet access to public elementary and middle schools. In addition, it supplies piped gas to 47,238 customers, including thermoelectric plants, cogeneration plants, gas stations, other businesses, and residences through a gas distribution network covering 833 kilometers in the State of Paraná. Companhia Paranaense de Energia Â- COPEL was founded in 1954 and is headquartered in Curitiba, Brazil.