Critical Comparison: The AES Corporation (AES) versus Its Competitors
The AES Corporation (NYSE: AES) is one of 85 public companies in the “Electric Utilities” industry, but how does it compare to its rivals? We will compare The AES Corporation to similar businesses based on the strength of its risk, analyst recommendations, valuation, earnings, dividends, institutional ownership and profitability.
The AES Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 4.5%. The AES Corporation pays out -42.1% of its earnings in the form of a dividend. As a group, “Electric Utilities” companies pay a dividend yield of 3.1% and pay out 101.2% of their earnings in the form of a dividend. The AES Corporation has increased its dividend for 4 consecutive years. The AES Corporation is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.
This table compares The AES Corporation and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The AES Corporation||-5.30%||15.86%||2.57%|
|The AES Corporation Competitors||-10.85%||3.46%||0.48%|
This is a summary of recent ratings and target prices for The AES Corporation and its rivals, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The AES Corporation||0||4||1||0||2.20|
|The AES Corporation Competitors||526||2929||2351||41||2.33|
The AES Corporation presently has a consensus target price of $12.83, suggesting a potential upside of 19.49%. As a group, “Electric Utilities” companies have a potential upside of 6.37%. Given The AES Corporation’s higher probable upside, research analysts plainly believe The AES Corporation is more favorable than its rivals.
Insider & Institutional Ownership
93.2% of The AES Corporation shares are owned by institutional investors. Comparatively, 65.6% of shares of all “Electric Utilities” companies are owned by institutional investors. 1.1% of The AES Corporation shares are owned by company insiders. Comparatively, 2.7% of shares of all “Electric Utilities” companies are owned by company insiders. 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.
Risk and Volatility
The AES Corporation has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, The AES Corporation’s rivals have a beta of 0.70, suggesting that their average stock price is 30% less volatile than the S&P 500.
Earnings & Valuation
This table compares The AES Corporation and its rivals gross revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|The AES Corporation||$14.05 billion||$3.58 billion||-9.42|
|The AES Corporation Competitors||$7.31 billion||$2.15 billion||29.65|
The AES Corporation has higher revenue and earnings than its rivals. The AES Corporation is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
The AES Corporation beats its rivals on 10 of the 15 factors compared.
The AES Corporation Company Profile
The AES Corporation is a holding company. The Company, through its subsidiaries and affiliates, operates a diversified portfolio of electricity generation and distribution businesses. It is organized into six strategic business units (SBUs): the United States; Andes; Brazil; Mexico, Central America and the Caribbean (MCAC); Europe, and Asia. As of December 31, 2016, its United States SBU had 18 generation facilities and two integrated utilities in the United States. As of December 31, 2016, its Andes SBU had generation facilities in three countries. Its Brazil SBU has generation and distribution businesses, Eletropaulo and Tiete. As of December 31, 2016, its MCAC SBU had a portfolio of distribution businesses and generation facilities, including renewable energy, in five countries. As of December 31, 2016, its Europe SBU had generation facilities in five countries. As of December 31, 2016, its Asia SBU had generation facilities in three countries.
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