American Electric Power (NYSE: AEP) and Kenon Holdings (NYSE:KEN) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Profitability

This table compares American Electric Power and Kenon Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Electric Power 12.21% 9.67% 2.73%
Kenon Holdings -5.10% -8.83% -1.54%

Volatility & Risk

American Electric Power has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500. Comparatively, Kenon Holdings has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Institutional & Insider Ownership

71.8% of American Electric Power shares are owned by institutional investors. Comparatively, 0.9% of Kenon Holdings shares are owned by institutional investors. 0.2% of American Electric Power shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

American Electric Power pays an annual dividend of $2.36 per share and has a dividend yield of 3.2%. Kenon Holdings does not pay a dividend. American Electric Power pays out 61.8% of its earnings in the form of a dividend. Kenon Holdings has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for American Electric Power and Kenon Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Electric Power 0 9 5 0 2.36
Kenon Holdings 0 0 0 0 N/A

American Electric Power presently has a consensus price target of $73.91, suggesting a potential downside of 0.35%. Given American Electric Power’s higher probable upside, equities research analysts plainly believe American Electric Power is more favorable than Kenon Holdings.

Valuation & Earnings

This table compares American Electric Power and Kenon Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Electric Power $15.95 billion 2.29 $5.12 billion $3.82 19.42
Kenon Holdings $2.08 billion 0.45 $522.12 million ($7.38) -2.37

American Electric Power has higher revenue and earnings than Kenon Holdings. Kenon Holdings is trading at a lower price-to-earnings ratio than American Electric Power, indicating that it is currently the more affordable of the two stocks.

Summary

American Electric Power beats Kenon Holdings on 12 of the 15 factors compared between the two stocks.

American Electric Power Company Profile

American Electric Power Company, Inc. (AEP) is a public utility holding company that owns, directly or indirectly, all of the outstanding common stock of its public utility subsidiaries and varying percentages of other subsidiaries. The service areas of the Company’s public utility subsidiaries cover the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. The Company’s segments include Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing. AEP’s vertically integrated utility operations are engaged in the generation, transmission and distribution of electricity for sale to retail and wholesale customers. Transmission and Distribution Utilities segment consists of the transmission and distribution of electricity for sale to retail and wholesale customers. AEP Transmission Holdco develops, constructs and operates transmission facilities.

Kenon Holdings Company Profile

Kenon Holdings Ltd. is a holding company that operates primarily growth-oriented businesses. The Company’s segments include I.C. Power Asia Development Ltd (IC Power), Qoros Automotive Co., Ltd. (Qoros) and Other. I.C. Power, through its subsidiary companies, is engaged in the production, operation and sale of electricity in countries in Latin America, the Caribbean region and Israel. Qoros is an automotive company. Its other activities include shipping services and renewable energy businesses. The Company also holds interests in ZIM Integrated Shipping Services, Ltd. (ZIM), which is a provider of container shipping services, and Primus Green Energy, Inc. (Primus), which is a developer and owner of a natural gas-to-liquid technology process. IC Power is an owner, developer and operator of power generation facilities, and operates power distribution business. Qoros offers approximately three vehicle models, which include the Qoros 3 Sedan, the Qoros 3 Hatch and the Qoros 3 City SUV.

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