Calpine (CPN) versus Atlantic Power (AT) Critical Survey

Calpine (NYSE: CPN) and Atlantic Power (NYSE:AT) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Profitability

This table compares Calpine and Atlantic Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Calpine -0.27% -7.68% -1.38%
Atlantic Power -14.09% 34.66% 1.25%

Earnings & Valuation

This table compares Calpine and Atlantic Power’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Calpine $6.72 billion 0.81 $92.00 million ($0.07) -215.43
Atlantic Power $399.20 million 0.72 -$113.90 million ($0.56) -4.46

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

Institutional & Insider Ownership

86.0% of Calpine shares are owned by institutional investors. Comparatively, 47.8% of Atlantic Power shares are owned by institutional investors. 1.2% of Calpine shares are owned by company insiders. Comparatively, 1.6% of Atlantic Power shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Calpine has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Atlantic Power has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Calpine and Atlantic Power, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Calpine 0 7 3 0 2.30
Atlantic Power 0 2 0 0 2.00

Calpine presently has a consensus price target of $14.86, suggesting a potential downside of 1.45%. Atlantic Power has a consensus price target of $2.48, suggesting a potential downside of 1.00%. Given Atlantic Power’s higher possible upside, analysts plainly believe Atlantic Power is more favorable than Calpine.

Summary

Calpine beats Atlantic Power on 8 of the 13 factors compared between the two stocks.

About Calpine

Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. As of December 31, 2016, the Company’s portfolio consisted of two types of power generation technologies, including natural gas-fired combustion turbines, such as combined-cycle plants, and renewable geothermal conventional steam turbines. As of December 31, 2016, the Company’s portfolio included 80 power plants, including one under construction, with an aggregate generation capacity of 25,908 Megawatt (MW) and 828 MW under construction. As of December 31, 2016, it had four MW of capacity from solar power generation technology at its Vineland Solar Energy Center in New Jersey.

About Atlantic Power

Atlantic Power Corporation (Atlantic Power) owns and operates a fleet of power generation assets in the United States and Canada. The Company’s power generation projects sell electricity to utilities and other commercial customers. Atlantic Power’s segments include East U.S., West U.S. and Canada. The Company’s East U.S. segment comprises natural gas, biomass, coal and hydro projects. The Company’s projects under the West U.S. segment include Naval Station, Naval Training Center, North Island, Oxnard, Manchief and Frederickson, which are focused on natural gas, and Koma Kulshan, which is focused on hydro. Under the Canada segment, the Company’s projects located in British Columbia include Mamquam, Mamquam and Williams Lake. Its Calstock and Tunis projects are located in Ontario. The Company’s portfolio consisted of interests in 19 operational power generation projects across nine states in the United States and two provinces in Canada, as of December 31, 2016.

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