NRG Yield (NYSE: NYLD) and Portland General Electric (NYSE:POR) are both mid-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.
Volatility and Risk
NRG Yield has a beta of 2.57, indicating that its stock price is 157% more volatile than the S&P 500. Comparatively, Portland General Electric has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.
Valuation and Earnings
This table compares NRG Yield and Portland General Electric’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NRG Yield||$1.01 billion||1.18||$753.00 million||$0.45||41.44|
|Portland General Electric||$1.99 billion||2.09||$687.00 million||$2.24||20.85|
NRG Yield has higher revenue, but lower earnings than Portland General Electric. Portland General Electric is trading at a lower price-to-earnings ratio than NRG Yield, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for NRG Yield and Portland General Electric, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Portland General Electric||4||3||0||0||1.43|
NRG Yield presently has a consensus price target of $20.00, indicating a potential upside of 7.24%. Portland General Electric has a consensus price target of $42.75, indicating a potential downside of 8.46%. Given NRG Yield’s stronger consensus rating and higher possible upside, equities research analysts plainly believe NRG Yield is more favorable than Portland General Electric.
NRG Yield pays an annual dividend of $1.12 per share and has a dividend yield of 6.0%. Portland General Electric pays an annual dividend of $1.36 per share and has a dividend yield of 2.9%. NRG Yield pays out 248.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Portland General Electric pays out 60.7% of its earnings in the form of a dividend. NRG Yield has increased its dividend for 11 consecutive years. NRG Yield is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
28.3% of NRG Yield shares are owned by institutional investors. Comparatively, 93.2% of Portland General Electric shares are owned by institutional investors. 0.2% of NRG Yield shares are owned by company insiders. Comparatively, 0.6% of Portland General Electric shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares NRG Yield and Portland General Electric’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Portland General Electric||10.06%||8.48%||2.64%|
Portland General Electric beats NRG Yield on 9 of the 17 factors compared between the two stocks.
NRG Yield Company Profile
NRG Yield, Inc. serves as the primary vehicle, through which NRG Energy, Inc. owns, operates and acquires contracted renewable and conventional generation and thermal infrastructure assets. It owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States. Its contracted generation portfolio includes three natural gas or dual-fired facilities, eight utility-scale solar and wind generation facilities and two portfolios of distributed solar facilities that collectively represent 1,324 net megawatt. The Company also own thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,098 net megawatt and electric generation capacity of 123 net megawatt. In July 2014, NRG Yield Inc completed its acquisition of three Right of First Offer (ROFO) assets from NRG Energy, Inc. In August 2014, it acquired Alta Wind facility located in Tehachapi, California from Terra-Gen Power LLC.
Portland General Electric Company Profile
Portland General Electric Company is an electric utility that is engaged in the wholesale purchase, transmission, distribution and retail sale of electricity in the State of Oregon. Its service area allocation of approximately 4,000 square miles is located entirely within Oregon and includes approximately 51 incorporated cities, of which Portland and Salem. It has five natural gas-fired generating facilities, which include Port Westward Unit 1 (PW1), Port Westward Unit 2 (PW2), Beaver natural gas-fired generating plant (Beaver), Coyote Springs Unit 1 (Coyote Springs) and Carty natural gas-fired generating plant (Carty). As of December 31, 2016, the Company owned and operated two wind farms, Biglow Canyon Wind Farm (Biglow Canyon) and Tucannon River Wind Farm (Tucannon River). The Company’s hydroelectric projects consist of Pelton/Round Butte on the Deschutes River near Madras, Oregon, four plants on the Clackamas River, and one on the Willamette River.
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