Head-To-Head Comparison: Fortis (NYSE:FTS) and Equatorial Energia (OTCMKTS:EQUEY)

Equatorial Energia (OTCMKTS:EQUEY) and Fortis (NYSE:FTS) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Analyst Ratings

This is a summary of current ratings and target prices for Equatorial Energia and Fortis, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equatorial Energia	0	0	0	0	0.00
Fortis	0	5	3	0	2.38

Fortis has a consensus price target of $66.33, indicating a potential upside of 19.57%. Given Fortis’ stronger consensus rating and higher possible upside, analysts plainly believe Fortis is more favorable than Equatorial Energia.

Dividends

Equatorial Energia pays an annual dividend of $0.07 per share and has a dividend yield of 1.0%. Fortis pays an annual dividend of $1.82 per share and has a dividend yield of 3.3%. Equatorial Energia pays out 29.7% of its earnings in the form of a dividend. Fortis pays out 73.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Fortis has raised its dividend for 5 consecutive years. Fortis is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

0.0% of Equatorial Energia shares are owned by institutional investors. Comparatively, 57.8% of Fortis shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Equatorial Energia and Fortis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equatorial Energia	N/A	N/A	N/A
Fortis	14.17%	7.16%	2.34%

Earnings & Valuation

This table compares Equatorial Energia and Fortis”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equatorial Energia	N/A	N/A	N/A	$0.25	29.30
Fortis	$8.71 billion	3.25	$1.29 billion	$2.47	22.46

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

Summary

Fortis beats Equatorial Energia on 11 of the 13 factors compared between the two stocks.

About Equatorial Energia

Equatorial Energia S.A., through its subsidiaries, engages in the electricity generation, distribution, transmission, and sanitation operations in Brazil. It operates through Distribution, Transmission, Wind Generation, Services, Sanitation, and Other segments. The company generates energy from wind, solar, biomass, qualified co-generation, and hydroelectric plants. It also distributes electric energy in the 217 municipalities of Maranhão State with a concession area of approximately 332,000 square kilometers serving approximately 2.5 million consumers; and 144 municipalities of Pará State with a concession area covering 1,248,000 square kilometers serving approximately 2.6 million consumers. In addition, the company distributes electric energy to 224 municipalities of Piauí State with a concession area covering 251,000 square kilometers serving approximately 1.3 million consumers; 102 municipalities of Alagoas State with a concession area covering 27,848 square kilometers serving approximately 1.2 million consumers; 16 municipalities of Amapá State serving approximately 209,000 consumers; and 72 municipalities of Rio de Janeiro State serving approximately 1.8 million consumers. Equatorial Energia S.A. was founded in 1958 and is based in Brasília, Brazil.

About Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.