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

Profitability

This table compares American Electric Power and Pampa Energia’s 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%
Pampa Energia 6.65% 24.73% 4.64%

Analyst Ratings

This is a summary of current recommendations for American Electric Power and Pampa Energia, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Electric Power 0 8 5 0 2.38
Pampa Energia 0 1 1 0 2.50

American Electric Power presently has a consensus target price of $73.91, suggesting a potential downside of 3.68%. Pampa Energia has a consensus target price of $72.00, suggesting a potential upside of 13.51%. Given Pampa Energia’s stronger consensus rating and higher possible upside, analysts plainly believe Pampa Energia is more favorable than American Electric Power.

Dividends

American Electric Power pays an annual dividend of $2.48 per share and has a dividend yield of 3.2%. Pampa Energia does not pay a dividend. American Electric Power pays out 64.9% of its earnings in the form of a dividend. Pampa Energia has raised its dividend for 4 consecutive years.

Risk & Volatility

American Electric Power has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500. Comparatively, Pampa Energia has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Earnings and Valuation

This table compares American Electric Power and Pampa Energia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Electric Power $16.40 billion 2.30 $610.90 million $3.82 20.09
Pampa Energia $2.13 billion 2.19 -$740,000.00 $3.32 19.11

American Electric Power has higher revenue and earnings than Pampa Energia. Pampa Energia 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.

Institutional and Insider Ownership

71.0% of American Electric Power shares are owned by institutional investors. Comparatively, 44.2% of Pampa Energia 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 will outperform the market over the long term.

Summary

American Electric Power beats Pampa Energia on 10 of the 17 factors compared between the two stocks.

About American Electric Power

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.

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.

Receive News & Ratings for American Electric Power Company Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for American Electric Power Company Inc and related companies with MarketBeat.com's FREE daily email newsletter.