TransAlta (NYSE:TAC) vs. Alliant Energy (NASDAQ:LNT) Head-To-Head Survey

Alliant Energy (NASDAQ:LNT) and TransAlta (NYSE:TAC) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Alliant Energy and TransAlta, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alliant Energy	0	5	9	0	2.64
TransAlta	1	1	6	1	2.78

Alliant Energy presently has a consensus target price of $77.18, suggesting a potential upside of 1.96%. TransAlta has a consensus target price of $22.25, suggesting a potential upside of 53.50%. Given TransAlta’s stronger consensus rating and higher probable upside, analysts plainly believe TransAlta is more favorable than Alliant Energy.

Valuation & Earnings

This table compares Alliant Energy and TransAlta”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alliant Energy	$4.42 billion	4.43	$810.00 million	$3.19	23.73
TransAlta	$1.72 billion	2.66	-$98.77 million	($0.54)	-26.84

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

Dividends

Alliant Energy pays an annual dividend of $2.14 per share and has a dividend yield of 2.8%. TransAlta pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. Alliant Energy pays out 67.1% of its earnings in the form of a dividend. TransAlta pays out -37.0% 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. Alliant Energy has raised its dividend for 22 consecutive years and TransAlta has raised its dividend for 2 consecutive years. Alliant Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Alliant Energy has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, TransAlta has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares Alliant Energy and TransAlta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alliant Energy	18.58%	11.37%	3.38%
TransAlta	-9.46%	9.52%	0.66%

Institutional & Insider Ownership

79.9% of Alliant Energy shares are held by institutional investors. Comparatively, 59.0% of TransAlta shares are held by institutional investors. 0.3% of Alliant Energy shares are held by company insiders. Comparatively, 13.1% of TransAlta shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Alliant Energy beats TransAlta on 12 of the 18 factors compared between the two stocks.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the United States. It operates in three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its other subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. It serves retail customers in the farming, agriculture, industrial manufacturing, chemical, packaging, and food industries, as well as wholesale customers comprising municipalities and rural electric cooperatives. In addition, the company owns and operates a short-line rail freight service in Iowa; a Mississippi River barge, rail, and truck freight terminal in Illinois; freight brokerage services; wind turbine blade recycling services; and a rail-served warehouse in Iowa. Further, it holds interests in a natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a wind farm located in Oklahoma. The company was formerly known as Interstate Energy Corp. and changed its name to Alliant Energy Corporation in May 1999. Alliant Energy Corporation was incorporated in 1981 and is headquartered in Madison, Wisconsin.

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.