Contrasting Azure Power Global (AZRE) & NextEra Energy (NEE)

Azure Power Global (NYSE: AZRE) and NextEra Energy (NYSE:NEE) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Profitability

This table compares Azure Power Global and NextEra Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Azure Power Global -34.55% -37.63% -3.20%
NextEra Energy 24.26% 11.88% 3.40%

Insider and Institutional Ownership

45.5% of Azure Power Global shares are owned by institutional investors. Comparatively, 76.7% of NextEra Energy shares are owned by institutional investors. 0.5% of NextEra Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Azure Power Global and NextEra Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Azure Power Global $65.30 million 6.35 $46.82 million ($5.48) -2.92
NextEra Energy $16.88 billion 4.09 $8.30 billion $8.73 16.86

NextEra Energy has higher revenue and earnings than Azure Power Global. Azure Power Global is trading at a lower price-to-earnings ratio than NextEra Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

NextEra Energy pays an annual dividend of $3.93 per share and has a dividend yield of 2.7%. Azure Power Global does not pay a dividend. NextEra Energy pays out 45.0% of its earnings in the form of a dividend. NextEra Energy has raised its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Azure Power Global and NextEra Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Azure Power Global 0 0 3 0 3.00
NextEra Energy 0 1 8 0 2.89

Azure Power Global currently has a consensus price target of $22.00, suggesting a potential upside of 37.50%. NextEra Energy has a consensus price target of $151.11, suggesting a potential upside of 2.67%. Given Azure Power Global’s stronger consensus rating and higher probable upside, equities analysts clearly believe Azure Power Global is more favorable than NextEra Energy.

Summary

NextEra Energy beats Azure Power Global on 11 of the 15 factors compared between the two stocks.

Azure Power Global Company Profile

Azure Power Global Limited is an India-based power producer. The Company sells solar power in India on long term fixed price contracts to its customers. The Company is also developing micro-grid applications for the highly fragmented and underserved electricity market in India. The Company operates approximately 20 utility scale projects and several commercial rooftop projects with a combined rated capacity of approximately 240 megawatts. The Company’s services include design, engineering and construction of grid integrated solar installations; off grid solar installations for villages, hamlets and remote areas; turnkey solar installations for commercial and residential complexes on roof tops, as back up and alternate source, and operation and maintenance of solar installations. The Company’s projects include Project Punjab, Rajasthan Projects, Gandhinagar Smart City Rooftop Project and Micro-Grids in Bihar and Uttar Pradesh.

NextEra Energy Company Profile

NextEra Energy, Inc. (NEE) is a holding company. The Company is an electric power companies in North America and, through its subsidiary NextEra Energy Resources, LLC (NEER) and its affiliated entities, is the generator of renewable energy from the wind and sun. NEE also owns and/or operates generation, transmission and distribution facilities to support its services to retail and wholesale customers, and has investments in gas infrastructure assets. Its segments include FPL and NEER. Florida Power & Light Company (FPL) is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. NEER is a diversified clean energy company with a business strategy that emphasizes the development, acquisition and operation of long-term contracted assets with a focus on renewable projects. NEER owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets.

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