Critical Review: Algonquin Power & Utilities (NYSE:AQN) & Evergy (NASDAQ:EVRG)

Evergy (NASDAQ:EVRG) and Algonquin Power & Utilities (NYSE:AQN) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Dividends

Evergy pays an annual dividend of $2.78 per share and has a dividend yield of 3.4%. Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.2%. Evergy pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Algonquin Power & Utilities pays out 113.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Evergy has raised its dividend for 20 consecutive years.

Profitability

This table compares Evergy and Algonquin Power & Utilities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evergy	14.35%	8.79%	2.68%
Algonquin Power & Utilities	7.32%	5.47%	1.95%

Earnings & Valuation

This table compares Evergy and Algonquin Power & Utilities”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evergy	$5.96 billion	3.20	$855.60 million	$3.67	22.57
Algonquin Power & Utilities	$2.43 billion	1.97	$180.80 million	$0.23	27.07

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

Risk and Volatility

Evergy has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Algonquin Power & Utilities has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Evergy and Algonquin Power & Utilities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evergy	0	3	6	1	2.80
Algonquin Power & Utilities	0	7	6	0	2.46

Evergy currently has a consensus price target of $87.75, suggesting a potential upside of 5.93%. Algonquin Power & Utilities has a consensus price target of $6.66, suggesting a potential upside of 6.97%. Given Algonquin Power & Utilities’ higher possible upside, analysts clearly believe Algonquin Power & Utilities is more favorable than Evergy.

Institutional and Insider Ownership

87.2% of Evergy shares are owned by institutional investors. Comparatively, 62.3% of Algonquin Power & Utilities shares are owned by institutional investors. 1.4% of Evergy shares are owned by company insiders. Comparatively, 0.1% of Algonquin Power & Utilities shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Evergy beats Algonquin Power & Utilities on 13 of the 17 factors compared between the two stocks.

About Evergy

Evergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.

About Algonquin Power & Utilities

Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.