TerraForm Global (NASDAQ: GLBL) and NextEra Energy (NYSE:NEE) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitabiliy and institutional ownership.

Profitability

This table compares TerraForm Global and NextEra Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TerraForm Global -22.46% -5.03% -2.36%
NextEra Energy 23.58% 11.82% 3.35%

Dividends

NextEra Energy pays an annual dividend of $3.93 per share and has a dividend yield of 2.8%. TerraForm Global does not pay a dividend. NextEra Energy pays out 47.9% of its earnings in the form of a dividend. TerraForm Global has increased its dividend for 7 consecutive years.

Institutional & Insider Ownership

57.6% of TerraForm Global shares are held by institutional investors. Comparatively, 77.9% of NextEra Energy shares are held by institutional investors. 0.5% of TerraForm Global shares are held by company insiders. Comparatively, 0.5% of NextEra Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

TerraForm Global has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, NextEra Energy has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.

Valuation & Earnings

This table compares TerraForm Global and NextEra Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TerraForm Global $214.32 million 2.65 $95.93 million ($0.45) -11.17
NextEra Energy $16.29 billion 4.05 $7.80 billion $8.21 17.18

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for TerraForm Global and NextEra Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TerraForm Global 0 2 1 0 2.33
NextEra Energy 0 1 8 0 2.89

TerraForm Global presently has a consensus price target of $7.00, indicating a potential upside of 39.30%. NextEra Energy has a consensus price target of $147.33, indicating a potential upside of 4.48%. Given TerraForm Global’s higher possible upside, equities analysts plainly believe TerraForm Global is more favorable than NextEra Energy.

Summary

NextEra Energy beats TerraForm Global on 11 of the 15 factors compared between the two stocks.

TerraForm Global Company Profile

TerraForm Global, Inc. is a holding company. The Company is a diversified renewable energy company that owns contracted solar and wind power plants. The Company operates through two segments: Solar Energy and Wind Energy. The segments include the Company’s entire portfolio of power plants. The Company’s portfolio consisted of solar and wind power plants located in Brazil, China, India, Malaysia, South Africa, Thailand and Uruguay with an aggregate net capacity of 916.4 megawatts (MW) as of October 31, 2016. The Company’s solar and wind power plants include Salvador, Bahia, Dunhuang, Honiton, NSM 24, Focal, NSM Suryalabh, NSM Sitara, NSM L’Volta, Millenium, Brakes, Raj 5, ESP Urja, Azure, Hanumanhatti, Gadag, Bhakrani, Silverstar Pavilion, Fortune 11, Corporate Season, Boshof, Witkop, Soutpan and PP Solar.

NextEra Energy Company Profile

NextEra Energy, Inc. (NEE) is a holding company. The Company is an electric power companies in North America and, through its subsidiary NextEra Energy Resources, LLC (NEER) and its affiliated entities, is the generator of renewable energy from the wind and sun. NEE also owns and/or operates generation, transmission and distribution facilities to support its services to retail and wholesale customers, and has investments in gas infrastructure assets. Its segments include FPL and NEER. Florida Power & Light Company (FPL) is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. NEER is a diversified clean energy company with a business strategy that emphasizes the development, acquisition and operation of long-term contracted assets with a focus on renewable projects. NEER owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets.

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