Critical Comparison: CENTRAIS ELETRI/S (NYSE:EBR) and American Electric Power (NYSE:AEP)

American Electric Power (NYSE:AEP) and CENTRAIS ELETRI/S (NYSE:EBR) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Dividends

American Electric Power pays an annual dividend of $2.80 per share and has a dividend yield of 3.1%. CENTRAIS ELETRI/S pays an annual dividend of $0.19 per share and has a dividend yield of 2.3%. American Electric Power pays out 70.9% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares American Electric Power and CENTRAIS ELETRI/S’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Electric Power $16.20 billion 2.77 $1.92 billion $3.95 23.01
CENTRAIS ELETRI/S $6.83 billion 1.66 $3.30 billion N/A N/A

CENTRAIS ELETRI/S has lower revenue, but higher earnings than American Electric Power.

Risk & Volatility

American Electric Power has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500. Comparatively, CENTRAIS ELETRI/S has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for American Electric Power and CENTRAIS ELETRI/S, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Electric Power 0 5 6 0 2.55
CENTRAIS ELETRI/S 1 0 0 0 1.00

American Electric Power currently has a consensus price target of $96.44, indicating a potential upside of 6.12%. Given American Electric Power’s stronger consensus rating and higher probable upside, equities research analysts plainly believe American Electric Power is more favorable than CENTRAIS ELETRI/S.

Profitability

This table compares American Electric Power and CENTRAIS ELETRI/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Electric Power 13.52% 11.09% 3.01%
CENTRAIS ELETRI/S N/A 25.76% 8.56%

Institutional & Insider Ownership

73.8% of American Electric Power shares are owned by institutional investors. Comparatively, 0.7% of CENTRAIS ELETRI/S shares are owned by institutional investors. 0.2% of American Electric Power shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

American Electric Power beats CENTRAIS ELETRI/S on 9 of the 14 factors compared between the two stocks.

American Electric Power Company Profile

American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. The company generates electricity using coal and lignite, natural gas, nuclear, hydroelectric, solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. The company owns, leases, or controls approximately 3,664 railcars, 468 barges, 9 towboats, and a coal handling terminal with approximately 18 million tons of annual capacity. American Electric Power Company, Inc. was founded in 1906 and is headquartered in Columbus, Ohio.

CENTRAIS ELETRI/S Company Profile

Centrais Elétricas Brasileiras S.A. – Eletrobras, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in Brazil. The company generates electricity through thermal, nuclear, wind, and hydroelectric plants. As of December 31, 2017, it owned and operated 44 hydroelectric plants and held interests in various other plants with a total installed capacity of 42,350 Megawatts (MW); 112 thermal plants, including coal, and oil and gas power generation units with an installed capacity of 2,646 MW; and 2 nuclear power plants with an installed capacity of 1,990 MW. The company also operates 71,684 kilometers of transmission lines and 6 power distributors that serve approximately 4.4 million consumers. Centrais Elétricas Brasileiras S.A. – Eletrobrás was founded in 1962 and is based in Rio de Janeiro, Brazil.

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