Enel Americas (NYSE: ENIA) and ALLETE (NYSE:ALE) are both mid-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.
Valuation and Earnings
This table compares Enel Americas and ALLETE’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Enel Americas||$7.76 billion||1.56||$497.97 million||$0.36||29.31|
|ALLETE||$1.34 billion||2.80||$155.30 million||$3.46||21.27|
Institutional and Insider Ownership
8.4% of Enel Americas shares are owned by institutional investors. Comparatively, 73.2% of ALLETE shares are owned by institutional investors. 0.0% of Enel Americas shares are owned by insiders. Comparatively, 0.4% of ALLETE shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Enel Americas pays an annual dividend of $0.21 per share and has a dividend yield of 2.0%. ALLETE pays an annual dividend of $2.14 per share and has a dividend yield of 2.9%. Enel Americas pays out 58.3% of its earnings in the form of a dividend. ALLETE pays out 61.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Enel Americas has raised its dividend for 6 consecutive years.
This is a breakdown of current recommendations and price targets for Enel Americas and ALLETE, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ALLETE has a consensus price target of $77.67, suggesting a potential upside of 5.53%. Given ALLETE’s higher possible upside, analysts plainly believe ALLETE is more favorable than Enel Americas.
This table compares Enel Americas and ALLETE’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Enel Americas has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, ALLETE has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.
ALLETE beats Enel Americas on 9 of the 16 factors compared between the two stocks.
Enel Americas Company Profile
Enel Americas S.A., formerly Enersis Americas S.A., through its subsidiaries and jointly controlled entities, is engaged in the electricity generation, transmission and distribution businesses in Chile, Brazil, Colombia, Peru and Argentina. The Company operates through two segments: Generation and Transmission, and Distribution. The Company’s Generation and Transmission segment operates through companies, including Central Comercializadora de Energia S.A. (Cemsa); Central Dock Sud S.A. (Dock Sud); Central Costanera S.A. (Costanera), and Hidroelectrica El Chocon S.A. (El Chocon). The Company’s Distribution segment operates through companies, including Empresa Distribuidora Sur S.A. (Edesur); Ampla Energia e Servicos S.A. (Ampla), and Companhia Energetica do Ceara S.A. (Coelce). The Company is engaged in non-electricity business through its subsidiary, Servicios Informaticos e Inmobiliarios Ltda. (SIEI). It holds interest in Yacylec S.A., which is an electricity transmission company.
ALLETE Company Profile
ALLETE, Inc. is an energy company. The Company’s segments include Regulated Operations, ALLETE Clean Energy, Inc. (ALLETE Clean Energy), U.S. Water Services Holding Company (U.S. Water Services), and Corporate and Other. The Regulated Operations segment includes its regulated utilities, Minnesota Power, and Superior Water, Light and Power Company, and its investment in American Transmission Company LLC. The ALLETE Clean Energy segment focuses on developing, acquiring and operating clean and renewable energy projects. The U.S. Water Services provides integrated water management for industry by combining chemical, equipment, engineering and service for customized solution. As of December 31, 2016, its Corporate and Other consisted of BNI Energy, Inc. (BNI Energy), its coal mining operations in North Dakota, ALLETE Properties, LLC (ALLETE Properties), its Florida real estate investment and approximately 5,000 acres of land in Minnesota.
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