American Electric Power (NASDAQ:AEP – Get Free Report) and Spruce Power (NYSE:SPRU – Get Free Report) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Risk & Volatility
American Electric Power has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Spruce Power has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
Insider and Institutional Ownership
75.2% of American Electric Power shares are owned by institutional investors. Comparatively, 20.8% of Spruce Power shares are owned by institutional investors. 0.1% of American Electric Power shares are owned by insiders. Comparatively, 9.6% of Spruce Power shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| American Electric Power | 13.48% | 11.41% | 3.01% |
| Spruce Power | -121.98% | -23.98% | -5.48% |
Earnings & Valuation
This table compares American Electric Power and Spruce Power”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Electric Power | $19.60 billion | 2.50 | $2.21 billion | $4.99 | 18.49 |
| Spruce Power | $77.58 million | 0.76 | -$65.83 million | ($5.06) | -0.62 |
American Electric Power has higher revenue and earnings than Spruce Power. Spruce Power is trading at a lower price-to-earnings ratio than American Electric Power, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and price targets for American Electric Power and Spruce Power, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Electric Power | 2 | 9 | 4 | 0 | 2.13 |
| Spruce Power | 0 | 0 | 0 | 0 | 0.00 |
American Electric Power presently has a consensus price target of $97.13, suggesting a potential upside of 5.28%. Given American Electric Power’s stronger consensus rating and higher possible upside, equities research analysts plainly believe American Electric Power is more favorable than Spruce Power.
Summary
American Electric Power beats Spruce Power on 12 of the 14 factors compared between the two stocks.
About American Electric Power
American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments. The company generates electricity using coal and lignite, natural gas, renewable, nuclear, hydro, solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. American Electric Power Company, Inc. was incorporated in 1906 and is headquartered in Columbus, Ohio.
About Spruce Power
Spruce Power Holding Corporation owns and operates distributed solar energy assets in the United States. The company provides subscription-based services for homeowners and businesses to own and maintain rooftop solar and battery storage. It offers its subscription-based services to approximately 75,000 customers. The company is headquartered in Denver, Colorado.
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