Atlantica Yield (AY) & ITC (ITC) Head to Head Review

Atlantica Yield (NASDAQ: AY) and ITC (NYSE:ITC) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

51.6% of Atlantica Yield shares are owned by institutional investors. Comparatively, 84.2% of ITC shares are owned by institutional investors. 3.2% of ITC shares are owned by 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 and ITC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantica Yield $971.80 million 2.06 -$4.85 million $0.27 74.07
ITC N/A N/A N/A $1.48 N/A

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Atlantica Yield and ITC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield 0 1 3 0 2.75
ITC 0 0 0 0 N/A

Atlantica Yield currently has a consensus target price of $24.75, indicating a potential upside of 23.75%.

Dividends

Atlantica Yield pays an annual dividend of $1.16 per share and has a dividend yield of 5.8%. ITC pays an annual dividend of $0.86 per share. Atlantica Yield pays out 429.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ITC pays out 58.1% of its earnings in the form of a dividend. ITC has raised its dividend for 6 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Atlantica Yield 10.57% 6.34% 1.17%
ITC 27.42% 16.62% 3.79%

Summary

ITC beats Atlantica Yield on 8 of the 12 factors compared between the two stocks.

Atlantica Yield 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.

ITC Company Profile

ITC Holdings Corp. (ITC Holdings) is a holding company. The Company is engaged in owning, operating, maintaining and investing in transmission infrastructure. The Company’s business consists primarily of the electric transmission operations of its Regulated Operating Subsidiaries. Its Regulated Operating Subsidiaries include International Transmission Company (ITCTransmission), Michigan Electric Transmission Company, LLC (METC), ITC Midwest LLC (ITC Midwest). The operations performed by its Regulated Operating Subsidiaries fall into the various categories, such as asset planning; engineering, design and construction; maintenance, and real time operations. Its customers include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers. It owns and operates high-voltage systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma.

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