Analyzing AES (NYSE:AES) and Companhia Paranaense de Energia (COPEL) (NYSE:ELP)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Companhia Paranaense de Energia (COPEL) and AES, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Companhia Paranaense de Energia (COPEL)	0	1	0	0	2.00
AES	1	4	7	0	2.50

AES has a consensus price target of $23.83, suggesting a potential upside of 77.00%. Given AES’s stronger consensus rating and higher probable upside, analysts plainly believe AES is more favorable than Companhia Paranaense de Energia (COPEL).

Volatility & Risk

Companhia Paranaense de Energia (COPEL) has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, AES has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares Companhia Paranaense de Energia (COPEL) and AES”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Companhia Paranaense de Energia (COPEL)	$4.20 billion	1.39	$520.91 million	$0.12	81.88
AES	$12.28 billion	0.78	$1.68 billion	$1.60	8.42

AES has higher revenue and earnings than Companhia Paranaense de Energia (COPEL). AES is trading at a lower price-to-earnings ratio than Companhia Paranaense de Energia (COPEL), indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

3.8% of Companhia Paranaense de Energia (COPEL) shares are owned by institutional investors. Comparatively, 93.1% of AES shares are owned by institutional investors. 0.6% of AES shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Companhia Paranaense de Energia (COPEL) pays an annual dividend of $0.25 per share and has a dividend yield of 2.5%. AES pays an annual dividend of $0.70 per share and has a dividend yield of 5.2%. Companhia Paranaense de Energia (COPEL) pays out 208.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AES pays out 43.8% of its earnings in the form of a dividend. AES has raised its dividend for 12 consecutive years. AES is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Companhia Paranaense de Energia (COPEL) and AES’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Companhia Paranaense de Energia (COPEL)	8.66%	7.77%	3.34%
AES	9.47%	18.83%	3.04%

Summary

AES beats Companhia Paranaense de Energia (COPEL) on 14 of the 17 factors compared between the two stocks.

About Companhia Paranaense de Energia (COPEL)

Companhia Paranaense de Energia – COPEL engages in the generation, transformation, distribution, and sale of electricity to industrial, residential, commercial, rural, and other customers in Brazil. The company operates through Power Generation and Transmission, Power Distribution, Power Sale, and Gas segments. It is also involved in the piped natural gas distribution. The company operates hydroelectric, wind, and thermoelectric plants; and owns and operates transmission and distribution lines. It holds concessions to distribute electricity in municipalities in the State of Paraná and in the municipality of Porto União in the State of Santa Catarina. Companhia Paranaense de Energia COPEL was founded in 1954 and is headquartered in Curitiba, Brazil.Companhia Paranaense de Energia – COPEL Operates as a subsidiary of Governo Do Estado Do Parana.

About AES

The AES Corporation, together with its subsidiaries, operates as a diversified power generation and utility company in the United States and internationally. The company owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses various fuels and technologies to generate electricity, such as coal, gas, hydro, wind, solar, and biomass, as well as renewables comprising energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.