Calpine (NYSE: CPN) and Atlantic Power (NYSE:AT) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Insider and Institutional Ownership

86.0% of Calpine shares are held by institutional investors. Comparatively, 47.8% of Atlantic Power shares are held by institutional investors. 1.2% of Calpine shares are held by company insiders. Comparatively, 1.6% of Atlantic Power shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Calpine and Atlantic Power, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Calpine 0 7 3 0 2.30
Atlantic Power 0 2 0 0 2.00

Calpine presently has a consensus target price of $14.86, suggesting a potential downside of 1.12%. Atlantic Power has a consensus target price of $2.48, suggesting a potential downside of 1.00%. Given Atlantic Power’s higher probable upside, analysts plainly believe Atlantic Power is more favorable than Calpine.

Risk and Volatility

Calpine has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Atlantic Power has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.

Earnings & Valuation

This table compares Calpine and Atlantic Power’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Calpine $6.72 billion 0.81 $92.00 million ($0.07) -214.68
Atlantic Power $399.20 million 0.72 -$113.90 million ($0.56) -4.46

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

Profitability

This table compares Calpine and Atlantic Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Calpine -0.27% -7.68% -1.38%
Atlantic Power -14.09% 34.66% 1.25%

Summary

Calpine beats Atlantic Power on 8 of the 13 factors compared between the two stocks.

About Calpine

Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. As of December 31, 2016, the Company’s portfolio consisted of two types of power generation technologies, including natural gas-fired combustion turbines, such as combined-cycle plants, and renewable geothermal conventional steam turbines. As of December 31, 2016, the Company’s portfolio included 80 power plants, including one under construction, with an aggregate generation capacity of 25,908 Megawatt (MW) and 828 MW under construction. As of December 31, 2016, it had four MW of capacity from solar power generation technology at its Vineland Solar Energy Center in New Jersey.

About Atlantic Power

Atlantic Power Corporation (Atlantic Power) owns and operates a fleet of power generation assets in the United States and Canada. The Company’s power generation projects sell electricity to utilities and other commercial customers. Atlantic Power’s segments include East U.S., West U.S. and Canada. The Company’s East U.S. segment comprises natural gas, biomass, coal and hydro projects. The Company’s projects under the West U.S. segment include Naval Station, Naval Training Center, North Island, Oxnard, Manchief and Frederickson, which are focused on natural gas, and Koma Kulshan, which is focused on hydro. Under the Canada segment, the Company’s projects located in British Columbia include Mamquam, Mamquam and Williams Lake. Its Calstock and Tunis projects are located in Ontario. The Company’s portfolio consisted of interests in 19 operational power generation projects across nine states in the United States and two provinces in Canada, as of December 31, 2016.

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