Analyzing Talen Energy Corp (TLN) and Pattern Energy Group (PEGI)
Pattern Energy Group (NASDAQ: PEGI) and Talen Energy Corp (NYSE:TLN) are both 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, profitabiliy and institutional ownership.
Volatility & Risk
Pattern Energy Group has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Talen Energy Corp has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.
Valuation and Earnings
This table compares Pattern Energy Group and Talen Energy Corp’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pattern Energy Group||$365.57 million||6.01||$188.67 million||$0.13||192.86|
|Talen Energy Corp||N/A||N/A||N/A||$1.35||10.37|
Pattern Energy Group has higher revenue and earnings than Talen Energy Corp. Talen Energy Corp is trading at a lower price-to-earnings ratio than Pattern Energy Group, indicating that it is currently the more affordable of the two stocks.
Pattern Energy Group pays an annual dividend of $1.65 per share and has a dividend yield of 6.6%. Talen Energy Corp does not pay a dividend. Pattern Energy Group pays out 1,269.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a breakdown of recent recommendations and price targets for Pattern Energy Group and Talen Energy Corp, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pattern Energy Group||0||3||7||0||2.70|
|Talen Energy Corp||0||1||0||0||2.00|
Pattern Energy Group currently has a consensus price target of $24.75, suggesting a potential downside of 1.28%. Given Pattern Energy Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Pattern Energy Group is more favorable than Talen Energy Corp.
Insider & Institutional Ownership
99.0% of Talen Energy Corp shares are owned by institutional investors. 1.8% of Pattern Energy Group shares are owned by company insiders. Comparatively, 0.2% of Talen Energy Corp 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.
This table compares Pattern Energy Group and Talen Energy Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pattern Energy Group||3.33%||0.37%||0.18%|
|Talen Energy Corp||7.11%||7.82%||2.84%|
Talen Energy Corp beats Pattern Energy Group on 7 of the 13 factors compared between the two stocks.
Pattern Energy Group Company Profile
Pattern Energy Group Inc. is an independent power company focused on owning and operating power projects. The Company holds interests in over 18 wind power projects located in the United States, Canada and Chile with total capacity of over 2,644 megawatts (MW). Each of its projects has contracted to sell its output pursuant to a power sale agreement. The Company sells its electricity and environmental attributes, including renewable energy credits (RECs), to local utilities under long-term and fixed-price power purchase agreements (PPAs). The Company’s operating projects are Gulf Wind, Texas; Hatchet Ridge, California; St. Joseph, Manitoba; Spring Valley, Nevada; Santa Isabel, Puerto Rico; Ocotillo, California; South Kent, Ontario; El Arrayan, Chile; Panhandle 1, Texas; Panhandle 2, Texas; Grand, Ontario; Post Rock, Kansas; Lost Creek, Missouri; K2, Ontario; Logan’s Gap, Texas, Amazon Wind Farm Fowler Ridge, Indiana, and Armow Wind power facility in Ontario, Canada.
Talen Energy Corp Company Profile
Talen Energy Corporation is a United States-based energy and power generation company. The Company owns or controls approximately 16,000 megawatts of capacity in wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. The Company generates and sells electricity, capacity and related products from power plants that use fuel sources, such as nuclear, natural gas and coal. The Company’s Susquehanna nuclear power plant has approximately two boiling water reactors with a combined capacity of over 2,600 megawatts. Its fossil fuel plants are located in Athens, Barney Davis, Bayonne, Brandon Shores, Brunner Island, Camden, Colstrip and Dartmouth, among others. It has an art energy trading center located in Allentown, Pennsylvania (PA), where it manages asset load obligations, fuel supply, capacity and related products, and all supporting physical or financial transactions for its electric generation portfolio.
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