Contrasting Atlantic Power Corporation (AT) & Dynegy (DYN)

Atlantic Power Corporation (NYSE: AT) and Dynegy (NYSE:DYN) 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, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings for Atlantic Power Corporation and Dynegy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantic Power Corporation 0 3 0 0 2.00
Dynegy 0 3 2 0 2.40

Atlantic Power Corporation currently has a consensus target price of $2.60, suggesting a potential upside of 4.00%. Dynegy has a consensus target price of $11.80, suggesting a potential upside of 25.80%. Given Dynegy’s stronger consensus rating and higher possible upside, analysts plainly believe Dynegy is more favorable than Atlantic Power Corporation.

Earnings and Valuation

This table compares Atlantic Power Corporation and Dynegy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atlantic Power Corporation $417.00 million 0.69 $179.50 million ($0.96) -2.60
Dynegy $4.70 billion 0.26 $905.00 million ($1.44) -6.51

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

Insider and Institutional Ownership

45.8% of Atlantic Power Corporation shares are owned by institutional investors. 1.6% of Atlantic Power Corporation shares are owned by company insiders. Comparatively, 1.8% of Dynegy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Atlantic Power Corporation -25.71% 27.03% 1.21%
Dynegy -2.72% -12.97% -1.80%

Risk and Volatility

Atlantic Power Corporation has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500. Comparatively, Dynegy has a beta of 1.86, meaning that its stock price is 86% more volatile than the S&P 500.

Summary

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

About Atlantic Power Corporation

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.

About Dynegy

Dynegy Inc. (Dynegy) is a holding company and conducts the business operations through its subsidiaries. The primary business of Dynegy is the production and sale of electric energy, capacity and ancillary services from the fleet of 18 operating power plants in six states totaling approximately 12,300 megawatt (MW) of generating capacity. Dynegy sells electric energy, capacity and ancillary services on a wholesale basis from its power generation facilities. Its customers include Regional Transmission Organization (RTOs) and Independent System Operators (ISOs), integrated utilities, municipalities, electric cooperatives, transmission and distribution utilities, industrial customers, power marketers, financial participants, such as banks and hedge funds, other power generators and commercial end-users. It has three segments: Midwest segment (GEN-MW), West segment (GEN-WE) and Northeast segment (GEN-NE). Its wholly owned subsidiary is Dynegy Holdings Inc. (DHI).

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