Atlantica Yield PLC (NASDAQ: ABY) and Dynegy (NYSE:DYN) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Atlantica Yield PLC and Dynegy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield PLC 0 1 3 0 2.75
Dynegy 0 4 5 0 2.56

Given Dynegy’s higher possible upside, analysts plainly believe Dynegy is more favorable than Atlantica Yield PLC.

Dividends

Atlantica Yield PLC pays an annual dividend of $1.04 per share and has a dividend yield of 4.5%. Dynegy does not pay a dividend. Atlantica Yield PLC pays out 346.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Atlantica Yield PLC has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Dynegy has a beta of 1.92, suggesting that its stock price is 92% more volatile than the S&P 500.

Profitability

This table compares Atlantica Yield PLC and Dynegy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield PLC 3.15% 1.58% 0.30%
Dynegy -0.22% -17.45% -2.41%

Insider and Institutional Ownership

50.7% of Atlantica Yield PLC shares are held by institutional investors. 1.8% of Dynegy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Atlantica Yield PLC and Dynegy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Atlantica Yield PLC $971.80 2.38 -$4.85 $0.30 76.93
Dynegy $4,318.00 0.00 -$1,240.00 ($0.52) N/A

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

Summary

Atlantica Yield PLC beats Dynegy on 8 of the 14 factors compared between the two stocks.

Atlantica Yield PLC Company Profile

Atlantica Yield plc, formerly Abengoa Yield plc, is a total return company. The Company owns, manages, and acquires renewable energy, conventional power, electric transmission lines and water assets, focused on North America (the United States and Mexico), South America (Peru, Chile, Brazil and Uruguay) and Europe, Middle East and Africa (Spain, Algeria and South Africa). Its segments include North America, South America and EMEA. It operates in business sectors, including renewable energy, conventional power, electric transmission lines and water. As of December 31, 2016, it owned or had interests in 21 assets, comprising 1,442 megawatt (MW) of renewable energy generation, 300 MW of conventional power generation, 1,099 miles of electric transmission lines, as well as an exchangeable preferred equity investment in Abengoa Concessoes Brasil Holding S.A., (ACBH). The renewable energy sector includes its activities related to the production electricity from solar power and wind plants.

Dynegy Company Profile

Dynegy Inc. (Dynegy) is a holding company and conducts the business operations through its subsidiaries. The primary business of Dynegy is the production and sale of electric energy, capacity and ancillary services from the fleet of 18 operating power plants in six states totaling approximately 12,300 megawatt (MW) of generating capacity. Dynegy sells electric energy, capacity and ancillary services on a wholesale basis from its power generation facilities. Its customers include Regional Transmission Organization (RTOs) and Independent System Operators (ISOs), integrated utilities, municipalities, electric cooperatives, transmission and distribution utilities, industrial customers, power marketers, financial participants, such as banks and hedge funds, other power generators and commercial end-users. It has three segments: Midwest segment (GEN-MW), West segment (GEN-WE) and Northeast segment (GEN-NE). Its wholly owned subsidiary is Dynegy Holdings Inc. (DHI).

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