Atlantic Power (NYSE: AT) and Covanta (NYSE:CVA) are both small-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.
Risk and Volatility
Atlantic Power has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500. Comparatively, Covanta has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Atlantic Power and Covanta, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Atlantic Power currently has a consensus price target of $2.50, suggesting a potential upside of 13.64%. Covanta has a consensus price target of $17.29, suggesting a potential upside of 16.40%. Given Covanta’s stronger consensus rating and higher possible upside, analysts plainly believe Covanta is more favorable than Atlantic Power.
Covanta pays an annual dividend of $1.00 per share and has a dividend yield of 6.7%. Atlantic Power does not pay a dividend. Covanta pays out -270.3% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares Atlantic Power and Covanta’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Atlantic Power||$431.00 million||0.59||-$93.00 million||($0.29)||-7.59|
|Covanta||$1.75 billion||1.11||$57.00 million||($0.37)||-40.14|
Covanta has higher revenue and earnings than Atlantic Power. Covanta is trading at a lower price-to-earnings ratio than Atlantic Power, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
49.5% of Atlantic Power shares are owned by institutional investors. Comparatively, 91.8% of Covanta shares are owned by institutional investors. 1.6% of Atlantic Power shares are owned by company insiders. Comparatively, 10.9% of Covanta shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Atlantic Power and Covanta’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Covanta beats Atlantic Power on 11 of the 16 factors compared between the two stocks.
Atlantic Power Company Profile
Atlantic Power Corporation owns and operates a fleet of power generation assets in the United States and Canada. As of December 31, 2017, its power generation projects had an aggregate gross electric generation capacity of approximately 1,633 megawatts consisting of interests in 18 operational power generation projects across 9 states in the United States and 2 provinces in Canada. The company sells its electricity to utilities and other customers. Atlantic Power Corporation was founded in 2004 and is headquartered in Dedham, Massachusetts.
Covanta Company Profile
Covanta Holding Corporation, through its subsidiaries, provides waste and energy services to municipal entities primarily in the United States and Canada. It owns and operates infrastructure for the conversion of waste to energy, as well as engages in related waste transport and disposal, and other renewable energy production businesses. The company disposes waste and generates electricity and/or steam; sells metal recovered during the energy-from-waste (EfW) process; and offers waste management solutions, such as site clean-up, wastewater treatment, transportation and logistics, recycling, and depackaging. It owns and operates 43 EfW facilities; and 5 additional energy generation facilities, including wood biomass and hydroelectric renewable energy production facilities in North America. The company also owns and operates 17 transfer stations, 19 material processing facilities, 1 regional metals recycling facility, and 4 landfills. Covanta Holding Corporation has a strategic partnership with the Green Investment Group Limited to develop, fund, and own EfW projects in Ireland and the United Kingdom. The company was formerly known as Danielson Holding Corporation and changed its name to Covanta Holding Corporation in September 2005. Covanta Holding Corporation was founded in 1960 and is headquartered in Morristown, New Jersey.
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