Head-To-Head Survey: Iberdrola (OTCMKTS:IBDRY) and NorthWestern (NASDAQ:NWE)

NorthWestern (NASDAQ:NWE) and Iberdrola (OTCMKTS:IBDRY) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Insider & Institutional Ownership

96.1% of NorthWestern shares are owned by institutional investors. Comparatively, 0.0% of Iberdrola shares are owned by institutional investors. 0.9% of NorthWestern shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for NorthWestern and Iberdrola, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NorthWestern	0	1	0	0	2.00
Iberdrola	0	2	2	0	2.50

NorthWestern currently has a consensus price target of $56.00, indicating a potential downside of 2.69%. Given NorthWestern’s higher possible upside, research analysts plainly believe NorthWestern is more favorable than Iberdrola.

Earnings and Valuation

This table compares NorthWestern and Iberdrola”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NorthWestern	$1.51 billion	2.33	$224.11 million	$3.67	15.68
Iberdrola	$48.42 billion	2.63	$6.07 billion	$3.31	23.06

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

Profitability

This table compares NorthWestern and Iberdrola’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NorthWestern	14.76%	7.30%	2.61%
Iberdrola	11.30%	8.27%	3.18%

Risk and Volatility

NorthWestern has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Iberdrola has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Dividends

NorthWestern pays an annual dividend of $2.64 per share and has a dividend yield of 4.6%. Iberdrola pays an annual dividend of $2.99 per share and has a dividend yield of 3.9%. NorthWestern pays out 71.9% of its earnings in the form of a dividend. Iberdrola pays out 90.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NorthWestern has increased its dividend for 21 consecutive years. NorthWestern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Iberdrola beats NorthWestern on 9 of the 17 factors compared between the two stocks.

About NorthWestern

NorthWestern Energy Group, Inc. provides electricity and natural gas to residential, commercial, and various industrial customers. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,600 miles of electric transmission and 18,674 miles of electric distribution lines with approximately 395 transmission and distribution substations; and 2,235 miles of natural gas transmission and 5,155 miles of natural gas distribution lines with approximately 133 city gate stations in Montana. It also operates 1,310 miles of electric transmission and 2,365 miles of electric distribution lines in South Dakota with approximately 124 transmission and distribution substations; and 55 miles of natural gas transmission and 2,573 miles of natural gas distribution lines in South Dakota and Nebraska. The company provides electricity and/or natural gas to approximately 775,300 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Energy Group, Inc. was founded in 1923 and is based in Sioux Falls, South Dakota.

About Iberdrola

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain, the United Kingdom, the United States, Mexico, Brazil, Germany, France, and Australia. It generates electricity from renewable sources, such as onshore and offshore wind, hydro, photovoltaic, combined cycle gas, and conventional nuclear, as well as through batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; energy retail supply activities, such as gas and electricity, and other products and services, including hydrogen, as well as non-renewable generation; and production of green hydrogen. It has a total installed capacity of 62,871 MW. In addition, the company offers heat pumps, self-consumption, electric mobility, solar, etc. services to residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is based in Bilbao, Spain.