Critical Analysis: Energias de Portugal (OTCMKTS:EDPFY) versus Ameren (NYSE:AEE)

Energias de Portugal (OTCMKTS:EDPFY) and Ameren (NYSE:AEE) are both large-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Energias de Portugal and Ameren, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Energias de Portugal	0	1	0	1	3.00
Ameren	0	5	9	0	2.64

Ameren has a consensus price target of $117.54, indicating a potential upside of 8.73%. Given Ameren’s higher possible upside, analysts plainly believe Ameren is more favorable than Energias de Portugal.

Profitability

This table compares Energias de Portugal and Ameren’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Energias de Portugal	N/A	N/A	N/A
Ameren	17.17%	10.94%	2.99%

Risk & Volatility

Energias de Portugal has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Ameren has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Institutional & Insider Ownership

79.1% of Ameren shares are held by institutional investors. 0.3% of Ameren shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Energias de Portugal and Ameren”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Energias de Portugal	N/A	N/A	N/A	$0.78	66.69
Ameren	$8.80 billion	3.40	$1.46 billion	$5.56	19.44

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

Dividends

Energias de Portugal pays an annual dividend of $1.51 per share and has a dividend yield of 2.9%. Ameren pays an annual dividend of $3.00 per share and has a dividend yield of 2.8%. Energias de Portugal pays out 193.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameren pays out 54.0% of its earnings in the form of a dividend. Ameren has increased its dividend for 12 consecutive years.

Summary

Ameren beats Energias de Portugal on 11 of the 16 factors compared between the two stocks.

About Energias de Portugal

EDP – Energias de Portugal, S.A. engages in the generation, transmission, distribution, and supply of electricity in Portugal, Spain, France, Poland, Romania, Italy, Belgium, the United Kingdom, Greece, Colombia, Brazil, North America, and internationally. It operates through Renewables, Networks, and Client Solutions & Energy Management segments. The company primarily generates and sells electricity through hydro, CCGT, coal, wind, solar, nuclear, and cogeneration and waste sources. It has an installed capacity of 28 GW; and operates 380,788 kilometers of distribution network lines. The company is also involved in the supply of natural gas. In addition, it offers engineering, laboratory tests, professional training, and energy services, as well as property management services. The company's electricity and gas customers include domestic, industrial, commercial, agricultural, and others. The company was incorporated in 1976 and is headquartered in Lisbon, Portugal.

About Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.