Avangrid (NYSE: AGR) and National Grid Transco, PLC (NYSE:NGG) are both large-cap utilities companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Avangrid and National Grid Transco, PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avangrid 1 0 4 0 2.60
National Grid Transco, PLC 2 6 7 0 2.33

Avangrid presently has a consensus target price of $44.88, suggesting a potential downside of 7.34%. National Grid Transco, PLC has a consensus target price of $69.00, suggesting a potential upside of 8.88%. Given National Grid Transco, PLC’s higher possible upside, analysts clearly believe National Grid Transco, PLC is more favorable than Avangrid.

Profitability

This table compares Avangrid and National Grid Transco, PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avangrid 11.25% 4.52% 2.20%
National Grid Transco, PLC N/A N/A N/A

Dividends

Avangrid pays an annual dividend of $1.73 per share and has a dividend yield of 3.6%. National Grid Transco, PLC pays an annual dividend of $2.89 per share and has a dividend yield of 4.6%. Avangrid pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Avangrid has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, National Grid Transco, PLC has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Earnings & Valuation

This table compares Avangrid and National Grid Transco, PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avangrid $6.00 billion 2.49 $1.94 billion $2.18 22.22
National Grid Transco, PLC $19.56 billion 2.22 $6.62 billion N/A N/A

National Grid Transco, PLC has higher revenue and earnings than Avangrid.

Institutional & Insider Ownership

13.5% of Avangrid shares are held by institutional investors. Comparatively, 5.6% of National Grid Transco, PLC shares are held by institutional investors. 0.3% of Avangrid shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Avangrid beats National Grid Transco, PLC on 9 of the 15 factors compared between the two stocks.

About Avangrid

Avangrid, Inc. is an energy and utility company. The Company operates through three segments: Networks, Renewables and Gas. The Networks segment includes all the energy transmission and distribution activities, and any other regulated activity originating in New York and Maine, and regulated electric distribution, electric transmission and gas distribution activities originating in Connecticut and Massachusetts. The Renewables segment owns, develops, constructs and/or operates electricity generation, including renewable and thermal generators, and associated transmission facilities. The Renewables segment includes activities relating to renewable energy, mainly wind energy generation and trading related with such activities. The Gas segment operates a natural gas storage and natural gas trading business through its subsidiaries, Enstor, Inc. and Enstor Energy Services, LLC.

About National Grid Transco, PLC

National Grid plc is an electricity and gas utility company focused on transmission and distribution activities in electricity and gas in both the United Kingdom and the United States. The Company’s segments include UK Electricity Transmission, which is engaged in high voltage electricity transmission networks in Great Britain; UK Gas Transmission, which is the gas transmission network in Great Britain and United Kingdom liquefied natural gas (LNG) storage activities; UK Gas Distribution, which includes approximately four of the eight regional networks of Great Britain’s gas distribution system, and US Regulated, which includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York, and New England and electricity generation facilities in New York. Its other activities relate to non-regulated businesses and other commercial operations not included within the above segments.

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