Financial Contrast: Avangrid (AGR) versus Sky Solar (SKYS)

Avangrid (NYSE:AGR) and Sky Solar (NASDAQ:SKYS) are both 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.

Earnings and Valuation

This table compares Avangrid and Sky Solar’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avangrid $5.96 billion 2.61 $381.00 million $2.20 22.92
Sky Solar $56.73 million N/A -$33.17 million ($0.80) -0.70

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

Institutional and Insider Ownership

14.2% of Avangrid shares are held by institutional investors. 0.4% of Avangrid shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Avangrid and Sky Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avangrid 6.29% 4.55% 2.21%
Sky Solar N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings and recommmendations for Avangrid and Sky Solar, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avangrid 3 2 5 0 2.20
Sky Solar 0 0 0 0 N/A

Avangrid presently has a consensus price target of $53.25, indicating a potential upside of 5.59%. Given Avangrid’s higher probable upside, equities analysts plainly believe Avangrid is more favorable than Sky Solar.

Dividends

Avangrid pays an annual dividend of $1.76 per share and has a dividend yield of 3.5%. Sky Solar does not pay a dividend. Avangrid pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avangrid has increased its dividend for 2 consecutive years.

Volatility & Risk

Avangrid has a beta of 0.09, suggesting that its share price is 91% less volatile than the S&P 500. Comparatively, Sky Solar has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Summary

Avangrid beats Sky Solar on 13 of the 15 factors compared between the two stocks.

About Avangrid

Avangrid, Inc. operates as an energy services holding company in the United States. It engages in the generation, transmission, and distribution of electricity, as well as distribution, transportation, and sale of natural gas. The company also develops, constructs, and operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. It delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities. In addition, the company generates and provides power and other services to federal and state agencies, as well as institutional retail and joint action agencies; and delivers thermal output to wholesale customers in the Western United States. As of November 2, 2018, it owned eight electric and natural gas utilities, serving 3.2 million customers in New York and New England, as well as owned and operated 7.1 gigawatts of electricity capacity, primarily through wind power in 22 states across the United States. The company was formerly known as Iberdrola USA, Inc. The company was founded in 1852 and is headquartered in Orange, Connecticut. Avangrid, Inc. is a subsidiary of Iberdrola, S.A.

About Sky Solar

Sky Solar Holdings, Ltd., an investment holding company, operates as an independent power producer worldwide. The company develops, owns, and operates solar parks primarily in the downstream solar market. It also sells solar energy systems, including pipeline; and engineering, construction, and procurement services, as well as engages in building and transferring solar parks. As of December 31, 2017, the company developed 318 solar parks with an aggregate capacity of 377.2 megawatts (MW) in Japan, Bulgaria, the Czech Republic, Spain, Canada, the United States, and Uruguay; and owned and operated 196.7 MW of solar parks, including 96.3 MW in Japan, 5.6 MW in the Czech Republic, 0.2 MW in Canada, 0.9 MW in Spain, 22.1 MW in the United States, and 71.6 MW in Uruguay. It also had approximately 400 MW of solar projects in various stages of development in countries, such as Chile, Japan, Canada, and the United States comprising 6.6 MW under construction, 180.1 MW of shovel-ready projects, and approximately 250 MW of solar parks in pipeline. The company has strategic partnership agreement with Hudson Clean Energy Partners for investing in renewable power and clean energy. Sky Solar Holdings, Ltd. was founded in 2009 and is headquartered in Admiralty, Hong Kong.

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