Rwe Ag Sp (OTCMKTS:RWEOY) and PETROLEO BRASIL/ADR (OTCMKTS:PBR) Head-To-Head Review

Rwe Ag Sp (OTCMKTS:RWEOY) and PETROLEO BRASIL/ADR (NYSE:PBR) are both large-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.

Risk and Volatility

Rwe Ag Sp has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, PETROLEO BRASIL/ADR has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Profitability

This table compares Rwe Ag Sp and PETROLEO BRASIL/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rwe Ag Sp N/A -8.72% -1.48%
PETROLEO BRASIL/ADR 10.45% 10.41% 3.35%

Dividends

Rwe Ag Sp pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. PETROLEO BRASIL/ADR pays an annual dividend of $0.34 per share and has a dividend yield of 2.2%. Rwe Ag Sp pays out -147.4% of its earnings in the form of a dividend. PETROLEO BRASIL/ADR pays out 23.8% 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.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Rwe Ag Sp and PETROLEO BRASIL/ADR, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rwe Ag Sp 0 1 1 0 2.50
PETROLEO BRASIL/ADR 1 0 6 0 2.71

PETROLEO BRASIL/ADR has a consensus target price of $20.50, suggesting a potential upside of 32.17%. Given PETROLEO BRASIL/ADR’s stronger consensus rating and higher possible upside, analysts plainly believe PETROLEO BRASIL/ADR is more favorable than Rwe Ag Sp.

Institutional and Insider Ownership

0.1% of Rwe Ag Sp shares are held by institutional investors. Comparatively, 7.7% of PETROLEO BRASIL/ADR shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Rwe Ag Sp and PETROLEO BRASIL/ADR’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rwe Ag Sp $15.98 billion 1.11 $465.31 million ($0.38) -76.08
PETROLEO BRASIL/ADR $95.58 billion 1.06 $7.17 billion $1.43 10.85

PETROLEO BRASIL/ADR has higher revenue and earnings than Rwe Ag Sp. Rwe Ag Sp is trading at a lower price-to-earnings ratio than PETROLEO BRASIL/ADR, indicating that it is currently the more affordable of the two stocks.

Summary

PETROLEO BRASIL/ADR beats Rwe Ag Sp on 13 of the 15 factors compared between the two stocks.

About Rwe Ag Sp

RWE Aktiengesellschaft supplies electricity and gas. It operates through four segments: Lignite & Nuclear; European Power; Supply & Trading; and Innogy. The company operates power stations based on lignite, coal, gas, nuclear power, renewable energies, and hydro and biomass; and operates and maintains solar farms, as well as generates heat. It is also involved in the supply and trade of power, gas, coal, freight, oil, weather derivatives, biomass, emissions certificates, and renewable energies; and construction of battery storage facilities. RWE Aktiengesellschaft manages electricity distribution networks; and gas distribution networks. The company offers its products and services to residential and commercial customers, industrial and corporate customers, and distributors in Germany, the Netherlands, Belgium, the United Kingdom, and Eastern Europe. It serves approximately 15.9 million electricity customers and approximately 6.6 million gas customers; and has a power generation capacity of approximately 40,000 megawatts. The company was founded in 1898 and is headquartered in Essen, Germany.

About PETROLEO BRASIL/ADR

Petróleo Brasileiro S.A. – Petrobras operates in the oil, natural gas, and energy industries in Brazil and internationally. It engages in prospecting, drilling, refining, processing, trading, and transporting crude oil from producing onshore and offshore oil fields and shale or other rocks, as well as oil products, natural gas, and other liquid hydrocarbons. The company's Exploration and Production segment engages in the exploration, development, and production of crude oil, natural gas liquids, and natural gas primarily for supplies to the its domestic refineries. Its Refining, Transportation and Marketing segment is involved in the refining, logistics, transport, and trading of crude oil and oil products; exportation of ethanol; and extraction and processing of shale, as well as holding interests in petrochemical companies. The company's Gas and Power segment engages in the logistic and trading of natural gas and liquid natural gas; generation of electricity through thermoelectric power plants; holding interests in transportation and distribution of natural gas; and fertilizer business operations. Its Biofuels segment is involved in the production of biodiesel and its co-products, as well as production and trading of ethanol, sugar, and electric power generated from sugarcane bagasse. The company's Distribution segment sells oil products, including gasoline and diesel; ethanol; and vehicle natural gas, as well as distributes oil products in South America. Petróleo Brasileiro S.A. – Petrobras was founded in 1953 and is headquartered in Rio de Janeiro, Brazil.

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