Reviewing Algonquin Power & Utilities (NYSE:AQN) and Brookfield Renewable Partners (NYSE:BEP)

Algonquin Power & Utilities (NYSE:AQN) and Brookfield Renewable Partners (NYSE:BEP) are both mid-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Algonquin Power & Utilities pays an annual dividend of $0.51 per share and has a dividend yield of 4.2%. Brookfield Renewable Partners pays an annual dividend of $2.06 per share and has a dividend yield of 6.1%. Algonquin Power & Utilities pays out 77.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brookfield Renewable Partners pays out 1,584.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brookfield Renewable Partners has raised its dividend for 5 consecutive years. Brookfield Renewable Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.



Risk & Volatility

Algonquin Power & Utilities has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Brookfield Renewable Partners has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Valuation & Earnings

This table compares Algonquin Power & Utilities and Brookfield Renewable Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Algonquin Power & Utilities $1.65 billion 3.63 $184.99 million $0.66 18.45
Brookfield Renewable Partners $2.98 billion 2.01 $62.00 million $0.13 258.15

Algonquin Power & Utilities has higher earnings, but lower revenue than Brookfield Renewable Partners. Algonquin Power & Utilities is trading at a lower price-to-earnings ratio than Brookfield Renewable Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Algonquin Power & Utilities and Brookfield Renewable Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Algonquin Power & Utilities 0 4 3 1 2.63
Brookfield Renewable Partners 1 2 1 0 2.00

Algonquin Power & Utilities currently has a consensus price target of $12.14, suggesting a potential downside of 0.30%. Brookfield Renewable Partners has a consensus price target of $34.80, suggesting a potential upside of 3.69%. Given Brookfield Renewable Partners’ higher probable upside, analysts clearly believe Brookfield Renewable Partners is more favorable than Algonquin Power & Utilities.

Profitability

This table compares Algonquin Power & Utilities and Brookfield Renewable Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Algonquin Power & Utilities 15.57% 7.64% 2.86%
Brookfield Renewable Partners 7.20% 1.47% 0.67%

Insider & Institutional Ownership

46.0% of Algonquin Power & Utilities shares are owned by institutional investors. Comparatively, 53.4% of Brookfield Renewable Partners shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Algonquin Power & Utilities beats Brookfield Renewable Partners on 11 of the 17 factors compared between the two stocks.

Algonquin Power & Utilities Company Profile

Algonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets in Canada and the United States. It generates and sells electrical energy through a portfolio of non-regulated renewable and clean energy power generation facilities. The company also owns and operates hydroelectric, wind, solar, and thermal facilities with a combined gross generating capacity of approximately 1.5 gigawatt; a portfolio of regulated electric, natural gas, water distribution, and wastewater collection utility systems. It serves approximately 266,000 electric connections; 338,000 natural gas connections; and 164,000 regulated water distribution and wastewater collection utility systems in the states of California, New Hampshire, Missouri, Kansas, Oklahoma, Arkansas, Georgia, Illinois, Iowa, Massachusetts, Arizona, and Texas. The company was incorporated in 1988 and is headquartered in Oakville, Canada.

Brookfield Renewable Partners Company Profile

Brookfield Renewable Partners L.P. owns a portfolio of renewable power generating facilities primarily in North America, Colombia, Brazil, Europe, India, and China. The company generates electricity through hydro, wind, solar, cogeneration, and biomass sources. Its portfolio consists of approximately 17,400 megawatts of installed capacity. Brookfield Renewable Partners Limited operates as the general partner of Brookfield Renewable Partners L.P. The company was formerly known as Brookfield Renewable Energy Partners L.P. and changed its name to Brookfield Renewable Partners L.P. in May 2016. Brookfield Renewable Partners L.P. was founded in 1999 and is headquartered in Hamilton, Bermuda.

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