Reviewing ENGIE BRASIL EN/S (OTCMKTS:EGIEY) and Fortis (OTCMKTS:FTS)

ENGIE BRASIL EN/S (OTCMKTS:EGIEY) and Fortis (NYSE:FTS) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.

Profitability

This table compares ENGIE BRASIL EN/S and Fortis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ENGIE BRASIL EN/S 23.57% 31.82% 8.74%
Fortis 13.69% 6.57% 2.23%

Valuation and Earnings

This table compares ENGIE BRASIL EN/S and Fortis’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ENGIE BRASIL EN/S $2.38 billion 2.67 $561.35 million N/A N/A
Fortis $6.62 billion 2.63 $1.30 billion $1.92 19.52

Fortis has higher revenue and earnings than ENGIE BRASIL EN/S.

Risk and Volatility

ENGIE BRASIL EN/S has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Fortis has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500.

Dividends

ENGIE BRASIL EN/S pays an annual dividend of $0.48 per share and has a dividend yield of 6.1%. Fortis pays an annual dividend of $1.36 per share and has a dividend yield of 3.6%. Fortis pays out 70.8% of its earnings in the form of a dividend. Fortis has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for ENGIE BRASIL EN/S and Fortis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ENGIE BRASIL EN/S 1 0 1 0 2.00
Fortis 1 2 9 0 2.67

Fortis has a consensus price target of $58.14, indicating a potential upside of 55.13%. Given Fortis’ stronger consensus rating and higher probable upside, analysts plainly believe Fortis is more favorable than ENGIE BRASIL EN/S.

Insider and Institutional Ownership

51.1% of Fortis shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Fortis beats ENGIE BRASIL EN/S on 8 of the 15 factors compared between the two stocks.

ENGIE BRASIL EN/S Company Profile

Engie Brasil Energia S.A., together with its subsidiaries, generates and sells electrical energy in Brazil. It operates 31 plants, including 11 hydroelectric power plants; 7 thermal power plants, which comprise 3 coal, 3 biomass, and 1 natural gas power plants; 9 wind farms; 2 photovoltaic solar power plants; and 2 small hydroelectric plants in the states of Rio Grande do Sul, Santa Catarina, Paraná, São Paulo, Minas Gerais, Mato Grosso do Sul, Mato Grosso, Goiás, Tocantins, Maranhão, Piauí, and Ceará. As of February 23, 2018, the company had an installed capacity of 10,898.8 megawatts. It also engages in buying and selling conventional and incentivized energy. The company was formerly known as Tractebel Energia S.A. and changed its name to Engie Brasil Energia S.A. in July 2016. The company is headquartered in Florianópolis, Brazil. Engie Brasil Energia S.A. is a subsidiary of ENGIE Brasil Participações Ltda.

Fortis Company Profile

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean. It generates, transmits, and distributes electricity to approximately 425,000 retail customers in southeastern Arizona; and 97,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,377 MW (MW), including 57 MW of solar capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 64 MW; and distributes natural gas to approximately 1,030,000 customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 564,000 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 hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador serving approximately 268,000 customers with an installed generating capacity of 139 MW; and on Prince Edward Island serving approximately 81,000 customers through generating facilities with a combined capacity of 145 MW. Additionally, it provides integrated electric utility service to approximately 176,000 customers in British Columbia; approximately 268,000 customers in Newfoundland and Labrador; approximately 30,000 customers on Grand Cayman, Cayman Islands; and approximately 15,000 customers on certain islands in Turks and Caicos, as well as holds long-term contracted generation assets in British Columbia and Belize, and the Aitken Creek natural gas storage facility. It also owns and operates transmission and distribution lines; and natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

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