Financial Analysis: Kenon (KEN) versus Enel Generacion Chile (EOCC)

Enel Generacion Chile (NYSE: EOCC) and Kenon (NYSE:KEN) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Risk and Volatility

Enel Generacion Chile has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Kenon has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Institutional & Insider Ownership

2.4% of Enel Generacion Chile shares are owned by institutional investors. Comparatively, 1.0% of Kenon shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Enel Generacion Chile and Kenon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enel Generacion Chile N/A N/A N/A
Kenon -3.75% -7.28% -1.28%

Dividends

Enel Generacion Chile pays an annual dividend of $1.06 per share and has a dividend yield of 3.8%. Kenon does not pay a dividend. Enel Generacion Chile pays out 50.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Enel Generacion Chile and Kenon, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enel Generacion Chile 2 0 0 0 1.00
Kenon 0 0 0 0 N/A

Enel Generacion Chile currently has a consensus target price of $24.20, indicating a potential downside of 13.14%. Given Enel Generacion Chile’s higher probable upside, equities analysts clearly believe Enel Generacion Chile is more favorable than Kenon.

Earnings & Valuation

This table compares Enel Generacion Chile and Kenon’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enel Generacion Chile $2.46 billion 3.10 $614.32 million $2.10 13.27
Kenon $1.87 billion 0.81 -$411.93 million ($1.50) -18.91

Enel Generacion Chile has higher revenue and earnings than Kenon. Kenon is trading at a lower price-to-earnings ratio than Enel Generacion Chile, indicating that it is currently the more affordable of the two stocks.

Summary

Enel Generacion Chile beats Kenon on 11 of the 13 factors compared between the two stocks.

About Enel Generacion Chile

Enel Generacion Chile SA, formerly Empresa Nacional De Electricidad SA, is a Chile-based company engaged in the business of electricity generation. The Company operates in Chile. The Company owns and operates a total of approximately 111-generation units in Chile both directly and through its subsidiaries, Pehuenche, Celta and GasAtacama. Of these generation units, approximately 38 are hydroelectric, with a total installed capacity of over 3,470 megawatts. There are approximately 22 thermal generation units that operate with gas, coal or oil with a total installed capacity of over 2,808 megawatts. There are over 51 wind powered generation units with an aggregate installed capacity of approximately 78 megawatts. The Company’s subsidiaries include Compania Electrica San Isidro S.A. (San Isidro), Compania Electrica Tarapaca S.A. (Celta), Empresa Electrica Pehuenche S.A. (Pehuenche) and GasAtacama S.A (GasAtacama). It is controlled by Enel Chile SA.

About Kenon

Kenon Holdings Ltd is a holding company that operates primarily growth-oriented businesses. The Company’s segments include I.C. Power Asia Development Ltd (IC Power), Qoros Automotive Co., Ltd. (Qoros) and Other. I.C. Power, through its subsidiary companies, is engaged in the production, operation and sale of electricity in the country Israel. Qoros is an automotive company. Its other activities include shipping services and renewable energy businesses. The Company also holds interests in ZIM Integrated Shipping Services, Ltd. (ZIM), which is a provider of container shipping services, and Primus Green Energy, Inc. (Primus), which is a developer and owner of a natural gas-to-liquid technology process. IC Power is an owner, developer and operator of power generation facilities, and operates power distribution business. Qoros offers approximately three vehicle models, which include the Qoros 3 Sedan, the Qoros 3 Hatch and the Qoros 3 City SUV.

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