Analyzing Avista Corporation (AVA) & Avangrid (AGR)

Avista Corporation (NYSE: AVA) and Avangrid (NYSE:AGR) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Dividends

Avista Corporation pays an annual dividend of $1.43 per share and has a dividend yield of 2.7%. Avangrid pays an annual dividend of $1.73 per share and has a dividend yield of 3.6%. Avista Corporation pays out 67.8% of its earnings in the form of a dividend. Avangrid pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avista Corporation has raised its dividend for 14 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Avista Corporation and Avangrid, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avista Corporation 1 3 0 0 1.75
Avangrid 1 0 4 0 2.60

Avista Corporation currently has a consensus price target of $44.00, indicating a potential downside of 15.76%. Avangrid has a consensus price target of $46.38, indicating a potential downside of 4.16%. Given Avangrid’s stronger consensus rating and higher probable upside, analysts clearly believe Avangrid is more favorable than Avista Corporation.

Insider & Institutional Ownership

69.7% of Avista Corporation shares are owned by institutional investors. Comparatively, 13.2% of Avangrid shares are owned by institutional investors. 1.1% of Avista Corporation shares are owned by insiders. Comparatively, 0.3% of Avangrid shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Avista Corporation and Avangrid’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avista Corporation 9.35% 8.19% 2.57%
Avangrid 11.25% 4.52% 2.20%

Risk and Volatility

Avista Corporation has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Avangrid has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Earnings & Valuation

This table compares Avista Corporation and Avangrid’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avista Corporation $1.46 billion 2.30 $471.76 million $2.11 24.75
Avangrid $6.00 billion 2.49 $1.94 billion $2.18 22.20

Avangrid has higher revenue and earnings than Avista Corporation. Avangrid is trading at a lower price-to-earnings ratio than Avista Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Avangrid beats Avista Corporation on 10 of the 17 factors compared between the two stocks.

About Avista Corporation

Avista Corporation is an electric and natural gas utility company. The Company operates through two segments: Avista Utilities, and Alaska Electric Light and Power Company (AEL&P). The Company’s regional services include government and higher education, medical services, retail trade and finance. The Company’s businesses also include sheet metal fabrication, venture fund investments, real estate investments, a company that explores markets that could be served with liquefied natural gas (LNG), as well as certain other investments of Avista Capital, which is a subsidiary of the Company. Avista Utilities is an operating division of the Company, which consists of its regulated utility operations in the Pacific Northwest. Avista Utilities division generates, transmits and distributes electricity, and distributes natural gas. As of December 31, 2016, AEL&P operated five hydroelectric generation facilities with 102.7 megawatts (MW) of hydroelectric generation capacity.

About Avangrid

Avangrid, Inc. is an energy and utility company. The Company operates through three segments: Networks, Renewables and Gas. The Networks segment includes all the energy transmission and distribution activities, and any other regulated activity originating in New York and Maine, and regulated electric distribution, electric transmission and gas distribution activities originating in Connecticut and Massachusetts. The Renewables segment owns, develops, constructs and/or operates electricity generation, including renewable and thermal generators, and associated transmission facilities. The Renewables segment includes activities relating to renewable energy, mainly wind energy generation and trading related with such activities. The Gas segment operates a natural gas storage and natural gas trading business through its subsidiaries, Enstor, Inc. and Enstor Energy Services, LLC.

What are top analysts saying about Avista Corporation? - Enter your email address in the form below to receive our free daily email newsletter that contains the latest headlines and analysts' recommendations for for Avista Corporation and related companies.

Comments

Leave a Reply


share news on Facebook
tweet this investment news
share on linkedin
share on StockTwits
share on Google Plus
share on reddit