Analyzing Kenon (NYSE:KEN) and Ameren (NYSE:AEE)

Kenon (NYSE:KEN) and Ameren (NYSE:AEE) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Dividends

Kenon pays an annual dividend of $4.80 per share and has a dividend yield of 10.6%. Ameren pays an annual dividend of $2.84 per share and has a dividend yield of 2.7%. Kenon pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameren pays out 62.4% of its earnings in the form of a dividend. Kenon has raised its dividend for 2 consecutive years and Ameren has raised its dividend for 12 consecutive years.

Profitability

This table compares Kenon and Ameren’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kenon	63.80%	-2.32%	-1.38%
Ameren	14.55%	10.38%	2.82%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Kenon and Ameren, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kenon	0	1	0	0	2.00
Ameren	0	4	6	0	2.60

Ameren has a consensus target price of $105.75, indicating a potential upside of 2.02%. Given Ameren’s stronger consensus rating and higher probable upside, analysts clearly believe Ameren is more favorable than Kenon.

Insider and Institutional Ownership

13.4% of Kenon shares are owned by institutional investors. Comparatively, 79.1% of Ameren shares are owned by institutional investors. 0.1% of Kenon shares are owned by insiders. Comparatively, 0.4% of Ameren shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Kenon has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Ameren has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Valuation and Earnings

This table compares Kenon and Ameren”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kenon	$751.30 million	3.14	$597.67 million	$3.20	14.14
Ameren	$7.62 billion	3.68	$1.18 billion	$4.55	22.78

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

Summary

Ameren beats Kenon on 14 of the 17 factors compared between the two stocks.

About Kenon

Kenon Holdings Ltd., through its subsidiaries, operates as an owner, developer, and operator of power generation facilities in Israel, the United States, and internationally. It operates through OPC Power Plants, CPV Group, and ZIM segments. The company engages in the generation and supply of electricity and energy; development, construction, and management of solar and wind energy, and conventional natural gas-fired power plants; and provision of container liner shipping services. It also operates a fleet of 150 vessels. Kenon Holdings Ltd. was incorporated in 2014 and is based in Singapore. Kenon Holdings Ltd. operates as a subsidiary of Ansonia Holdings Singapore B.V.

About Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.