Atlantica Yield (NASDAQ: AY) and CPFL Energia (NYSE:CPL) are both mid-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Earnings and Valuation

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This table compares Atlantica Yield and CPFL Energia’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantica Yield $971.80 million 2.16 -$4.85 million $0.27 77.70
CPFL Energia $5.51 billion 1.23 $258.28 million $0.53 25.09

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

Dividends

Atlantica Yield pays an annual dividend of $1.16 per share and has a dividend yield of 5.5%. CPFL Energia does not pay a dividend. Atlantica Yield pays out 429.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CPFL Energia has raised its dividend for 4 consecutive years.

Profitability

This table compares Atlantica Yield and CPFL Energia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield 2.85% 1.41% 0.27%
CPFL Energia 3.48% 8.18% 2.09%

Risk & Volatility

Atlantica Yield has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, CPFL Energia has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Atlantica Yield and CPFL Energia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield 0 1 3 0 2.75
CPFL Energia 0 0 0 0 N/A

Atlantica Yield presently has a consensus target price of $24.75, suggesting a potential upside of 17.97%. Given Atlantica Yield’s higher possible upside, analysts plainly believe Atlantica Yield is more favorable than CPFL Energia.

Insider and Institutional Ownership

50.9% of Atlantica Yield shares are held by institutional investors. Comparatively, 1.7% of CPFL Energia shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

CPFL Energia beats Atlantica Yield on 9 of the 15 factors compared between the two stocks.

About Atlantica Yield

Atlantica Yield plc, formerly Abengoa Yield plc, is a total return company. The Company owns, manages, and acquires renewable energy, conventional power, electric transmission lines and water assets, focused on North America (the United States and Mexico), South America (Peru, Chile, Brazil and Uruguay) and Europe, Middle East and Africa (Spain, Algeria and South Africa). Its segments include North America, South America and EMEA. It operates in business sectors, including renewable energy, conventional power, electric transmission lines and water. As of December 31, 2016, it owned or had interests in 21 assets, comprising 1,442 megawatt (MW) of renewable energy generation, 300 MW of conventional power generation, 1,099 miles of electric transmission lines, as well as an exchangeable preferred equity investment in Abengoa Concessoes Brasil Holding S.A., (ACBH). The renewable energy sector includes its activities related to the production electricity from solar power and wind plants.

About CPFL Energia

CPFL Energia S.A. is a holding company. The Company, through its subsidiaries, distributes, generates, transmits and commercializes electricity in Brazil, as well as provides energy-related services. Its segments include Distribution, Conventional Generation Sources, Renewable Energy Generation, Commercialization and Services. The Company operates its distribution segment through its eight distributors. Its installed capacity in conventional generation is approximately 2,200 megawatt (MW). The Company, through its subsidiary CPFL Geracao, holds equity interests in eight Hydroelectric Power Plants. It operates in the segment of generation of energy of renewable sources, such as wind, biomass thermal plants, SHPPs and solar, through its subsidiary, CPFL Renovaveis. The Company operates in the segment of commercialization (power competitive supply) through its subsidiary, CPFL Brasil. The Company operates in the segment of value-added services providing electricity-related services.

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