NRG Yield (NYSE: NYLD) and Pampa Energia (NYSE:PAM) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Institutional and Insider Ownership

28.4% of NRG Yield shares are held by institutional investors. Comparatively, 44.1% of Pampa Energia shares are held by institutional investors. 0.2% of NRG Yield shares are held by 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.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for NRG Yield and Pampa Energia, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NRG Yield 0 6 4 0 2.40
Pampa Energia 0 1 1 0 2.50

NRG Yield currently has a consensus price target of $19.57, suggesting a potential upside of 4.66%. Pampa Energia has a consensus price target of $72.00, suggesting a potential upside of 6.75%. Given Pampa Energia’s stronger consensus rating and higher possible upside, analysts plainly believe Pampa Energia is more favorable than NRG Yield.

Dividends

NRG Yield pays an annual dividend of $1.12 per share and has a dividend yield of 6.0%. Pampa Energia does not pay a dividend. NRG Yield pays out 248.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares NRG Yield and Pampa Energia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NRG Yield $1.01 billion 1.82 $753.00 million $0.45 41.56
Pampa Energia $3.11 billion 1.59 $723.59 million $1.44 46.84

NRG Yield has higher revenue, but lower earnings than Pampa Energia. NRG Yield is trading at a lower price-to-earnings ratio than Pampa Energia, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares NRG Yield and Pampa Energia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NRG Yield 4.47% 1.89% 0.53%
Pampa Energia 3.37% 11.62% 2.17%

Risk and Volatility

NRG Yield has a beta of 2.57, meaning that its share price is 157% more volatile than the S&P 500. Comparatively, Pampa Energia has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Summary

Pampa Energia beats NRG Yield on 9 of the 16 factors compared between the two stocks.

About NRG Yield

NRG Yield, Inc. serves as the primary vehicle, through which NRG Energy, Inc. owns, operates and acquires contracted renewable and conventional generation and thermal infrastructure assets. It owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States. Its contracted generation portfolio includes three natural gas or dual-fired facilities, eight utility-scale solar and wind generation facilities and two portfolios of distributed solar facilities that collectively represent 1,324 net megawatt. The Company also own thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,098 net megawatt and electric generation capacity of 123 net megawatt. In July 2014, NRG Yield Inc completed its acquisition of three Right of First Offer (ROFO) assets from NRG Energy, Inc. In August 2014, it acquired Alta Wind facility located in Tehachapi, California from Terra-Gen Power LLC.

About Pampa Energia

Pampa Energia S.A. is an integrated electricity company. The Company, through its subsidiaries, is engaged in the generation, transmission and distribution of electricity in Argentina. Its segments include generation, transmission, distribution, oil and gas, and holding and others. Its generation segment includes a direct and indirect equity interest in Central Piedra Buena S.A., Central Termica Guemes S.A., Central Termica Loma de la Lata S.A. and Pampa Comercializadora S.A, among others, and investments in companies in the electricity generation sector. Its transmission segment includes an indirect equity interest through Compania Inversora en Transmision Electrica Citelec S.A. Its distribution segment includes an indirect equity interest in Electricidad Argentina S.A. and Empresa Distribuidora y Comercializadora Norte S.A. Its Oil and gas segment includes a direct interest in Petrolera Pampa S.A. Its holding and others segment includes financial investment operations, among others.

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