Head to Head Analysis: IDACORP (IDA) versus NRG Energy (NRG)
IDACORP (NYSE: IDA) and NRG Energy (NYSE:NRG) are both mid-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.
IDACORP pays an annual dividend of $2.20 per share and has a dividend yield of 2.4%. NRG Energy pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. IDACORP pays out 55.6% of its earnings in the form of a dividend. NRG Energy pays out -2.8% 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. NRG Energy has raised its dividend for 5 consecutive years.
Institutional and Insider Ownership
76.0% of IDACORP shares are held by institutional investors. Comparatively, 91.7% of NRG Energy shares are held by institutional investors. 0.7% of IDACORP shares are held by company insiders. Comparatively, 0.3% of NRG Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares IDACORP and NRG Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares IDACORP and NRG Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|IDACORP||$1.30 billion||3.49||$438.95 million||$3.96||22.74|
|NRG Energy||$12.53 billion||0.58||$2.50 billion||($4.36)||-5.26|
NRG Energy has higher revenue and earnings than IDACORP. NRG Energy is trading at a lower price-to-earnings ratio than IDACORP, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for IDACORP and NRG Energy, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
IDACORP currently has a consensus target price of $75.00, indicating a potential downside of 16.72%. NRG Energy has a consensus target price of $21.83, indicating a potential downside of 4.78%. Given NRG Energy’s stronger consensus rating and higher probable upside, analysts plainly believe NRG Energy is more favorable than IDACORP.
Risk and Volatility
IDACORP has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, NRG Energy has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.
NRG Energy beats IDACORP on 10 of the 17 factors compared between the two stocks.
IDACORP, Inc. is a holding company. The Company’s principal operating subsidiary is Idaho Power Company (Idaho Power). The Company’s segment is utility operations. The utility operations segment’s primary source of revenue is the regulated operations of Idaho Power. Idaho Power is an electric utility engaged in the generation, transmission, distribution, sale and purchase of electric energy and capacity. Idaho Power is the parent of Idaho Energy Resources Co. (IERCo), a joint venturer in Bridger Coal Company, which mines and supplies coal to the Jim Bridger generating plant owned in part by Idaho Power. Its subsidiaries also include IDACORP Financial Services, Inc., an investor in affordable housing and other real estate investments, and Ida-West Energy Company, an operator of small hydroelectric generation projects. As of December 31, 2016, Idaho Power provided electric utility service to approximately 535,000 general business customers in southern Idaho and eastern Oregon.
About NRG Energy
NRG Energy, Inc. (NRG) is an integrated power company. The Company is engaged in producing, selling and delivering electricity and related products and services in various markets in the United States. The Company’s segments include Generation, Retail, Renewables, NRG Yield, Inc. (NRG Yield) and Corporate activities. The Generation segment includes generation, international and Boston Energy Trading and Marketing LLC (BETM). The Retail segment includes Mass customers and Business Solutions. Its Business Solutions include commercial, industrial and governmental/institutional (C&I) customers, and other distributed and reliability products. The Renewables segment includes solar and wind assets. The NRG Yield segment includes certain of the Company’s contracted generation assets. The corporate activities segment includes residential solar and electric vehicle services. The Company owned and operated approximately 47,000 megawatts (MW) of generation, as of December 31, 2016.
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