Atlantica Yield PLC (NASDAQ: ABY) and CPFL Energia (NYSE:CPL) are both mid-cap utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitabiliy, analyst recommendations, dividends, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Atlantica Yield PLC and CPFL Energia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield PLC 0 1 2 1 3.00
CPFL Energia 0 1 0 0 2.00

Atlantica Yield PLC presently has a consensus price target of $22.33, suggesting a potential upside of 9.96%. Given Atlantica Yield PLC’s stronger consensus rating and higher probable upside, equities analysts plainly believe Atlantica Yield PLC is more favorable than CPFL Energia.

Risk and Volatility

Atlantica Yield PLC has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, CPFL Energia has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Earnings & Valuation

This table compares Atlantica Yield PLC and CPFL Energia’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atlantica Yield PLC $970.02 million 2.10 $677.13 million $0.09 225.67
CPFL Energia $6.15 billion 1.39 $1.24 billion N/A N/A

CPFL Energia has higher revenue and earnings than Atlantica Yield PLC.

Profitability

This table compares Atlantica Yield PLC and CPFL Energia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield PLC 0.97% 0.48% 0.09%
CPFL Energia 4.34% 8.52% 2.22%

Dividends

Atlantica Yield PLC pays an annual dividend of $1.00 per share and has a dividend yield of 4.9%. CPFL Energia pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. Atlantica Yield PLC pays out 1,111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Atlantica Yield PLC has increased its dividend for 3 consecutive years. Atlantica Yield PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

54.4% of Atlantica Yield PLC shares are owned by institutional investors. Comparatively, 1.9% of CPFL Energia shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Atlantica Yield PLC beats CPFL Energia on 9 of the 16 factors compared between the two stocks.

About Atlantica Yield PLC

Atlantica Yield plc, formerly Abengoa Yield plc, is a total return company. The Company owns, manages, and acquires renewable energy, conventional power, electric transmission lines and water assets, focused on North America (the United States and Mexico), South America (Peru, Chile, Brazil and Uruguay) and Europe, Middle East and Africa (Spain, Algeria and South Africa). Its segments include North America, South America and EMEA. It operates in business sectors, including renewable energy, conventional power, electric transmission lines and water. As of December 31, 2016, it owned or had interests in 21 assets, comprising 1,442 megawatt (MW) of renewable energy generation, 300 MW of conventional power generation, 1,099 miles of electric transmission lines, as well as an exchangeable preferred equity investment in Abengoa Concessoes Brasil Holding S.A., (ACBH). The renewable energy sector includes its activities related to the production electricity from solar power and wind plants.

About CPFL Energia

CPFL Energia S.A. is a holding company. The Company, through its subsidiaries, distributes, generates, transmits and commercializes electricity in Brazil, as well as provides energy-related services. Its segments include Distribution, Conventional Generation Sources, Renewable Energy Generation, Commercialization and Services. The Company operates its distribution segment through its eight distributors. Its installed capacity in conventional generation is approximately 2,200 megawatt (MW). The Company, through its subsidiary CPFL Geracao, holds equity interests in eight Hydroelectric Power Plants. It operates in the segment of generation of energy of renewable sources, such as wind, biomass thermal plants, SHPPs and solar, through its subsidiary, CPFL Renovaveis. The Company operates in the segment of commercialization (power competitive supply) through its subsidiary, CPFL Brasil. The Company operates in the segment of value-added services providing electricity-related services.

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