Head-To-Head Comparison: United Utilities Group (OTCMKTS:UUGRY) and TransAlta (NYSE:TAC)

TransAlta (NYSE:TAC) and United Utilities Group (OTCMKTS:UUGRY) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Risk and Volatility

TransAlta has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, United Utilities Group has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Earnings and Valuation

This table compares TransAlta and United Utilities Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TransAlta	$1.72 billion	2.59	-$98.77 million	($0.54)	-26.08
United Utilities Group	$3.51 billion	3.79	$786.53 million	N/A	N/A

United Utilities Group has higher revenue and earnings than TransAlta.

Dividends

TransAlta pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. United Utilities Group pays an annual dividend of $1.76 per share and has a dividend yield of 4.9%. TransAlta pays out -37.0% of its earnings in the form of a dividend. TransAlta has increased its dividend for 2 consecutive years.

Profitability

This table compares TransAlta and United Utilities Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransAlta	-9.46%	9.52%	0.66%
United Utilities Group	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings for TransAlta and United Utilities Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TransAlta	1	1	6	1	2.78
United Utilities Group	0	4	3	1	2.62

TransAlta presently has a consensus price target of $22.25, suggesting a potential upside of 57.98%. Given TransAlta’s stronger consensus rating and higher probable upside, equities research analysts clearly believe TransAlta is more favorable than United Utilities Group.

Insider & Institutional Ownership

59.0% of TransAlta shares are held by institutional investors. 13.1% of TransAlta shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

TransAlta beats United Utilities Group on 9 of the 15 factors compared between the two stocks.

About TransAlta

TransAlta Corporation engages in the development, production, and sale of electric energy. It operates through Hydro, Wind and Solar, Gas, Energy Transition, and Energy Marketing segments. The Hydro segment holds interest of approximately 922 megawatts (MW) of owned hydroelectric generating capacity located in Alberta, British Columbia, and Ontario. The Wind and Solar segment has a net ownership interest of approximately 2,057 MW of owned wind and solar electrical-generating capacity, as well as battery storage facilities located in Alberta, Ontario, New Brunswick, and Québec in Canada; the states of Massachusetts, Minnesota, New Hampshire, North Carolina, Pennsylvania, Washington, and Wyoming in the United States; and the state of Western Australia. The Gas segment has a net ownership interest of approximately 2,775 MW of owned gas electrical-generating capacity, and facilities located in Alberta, Ontario, Michigan, and the state of Western Australia. The Energy Transition segment has a net ownership interest of approximately 671 MW of owned coal electrical-generating capacity, as well as operates the Skookumchuck hydro facility in Centralia; and engages in the highvale mine and the mine reclamation activities. The Energy Marketing segment is involved in the trading of power, natural gas, and environmental products. It serves customers in various industry segments, including commercial real estate, municipal, manufacturing, industrial, hospitality, finance, and oil and gas. TransAlta Corporation was founded in 1909 and is headquartered in Calgary, Canada.

About United Utilities Group

United Utilities Group PLC provides water and wastewater services in the United Kingdom. It is involved in the renewable energy generation, corporate trustee, financing, and property management activities; and provision of consulting, and project management services. The company operates 43,000 kilometers of water pipes; and 79,000 kilometers of wastewater pipes. United Utilities Group PLC was incorporated in 2008 and is based in Warrington, the United Kingdom.