Nextera Energy Partners (NYSE:NEP) and PPL (NYSE:PPL) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.
Volatility and Risk
Nextera Energy Partners has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, PPL has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.
This is a summary of recent ratings and target prices for Nextera Energy Partners and PPL, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Nextera Energy Partners||0||5||5||0||2.50|
Nextera Energy Partners presently has a consensus price target of $48.44, indicating a potential upside of 0.39%. PPL has a consensus price target of $34.11, indicating a potential upside of 10.00%. Given PPL’s higher probable upside, analysts clearly believe PPL is more favorable than Nextera Energy Partners.
Earnings & Valuation
This table compares Nextera Energy Partners and PPL’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Nextera Energy Partners||$771.00 million||3.51||$192.00 million||$2.91||16.58|
|PPL||$7.79 billion||2.87||$1.83 billion||$2.40||12.92|
PPL has higher revenue and earnings than Nextera Energy Partners. PPL is trading at a lower price-to-earnings ratio than Nextera Energy Partners, indicating that it is currently the more affordable of the two stocks.
Nextera Energy Partners pays an annual dividend of $1.93 per share and has a dividend yield of 4.0%. PPL pays an annual dividend of $1.65 per share and has a dividend yield of 5.3%. Nextera Energy Partners pays out 66.3% of its earnings in the form of a dividend. PPL pays out 68.8% 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. Nextera Energy Partners has raised its dividend for 3 consecutive years and PPL has raised its dividend for 7 consecutive years. PPL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Nextera Energy Partners and PPL’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Nextera Energy Partners||12.24%||2.17%||1.05%|
Institutional and Insider Ownership
83.4% of Nextera Energy Partners shares are owned by institutional investors. Comparatively, 72.9% of PPL shares are owned by institutional investors. 0.6% of Nextera Energy Partners shares are owned by insiders. Comparatively, 0.3% of PPL shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Nextera Energy Partners beats PPL on 9 of the 17 factors compared between the two stocks.
Nextera Energy Partners Company Profile
NextEra Energy Partners, LP acquires, owns, and manages contracted clean energy projects in the United States. It owns a portfolio of contracted renewable generation assets consisting of wind and solar projects with approximately 4,859 megawatts of capacity, as well as seven contracted natural gas pipeline assets. The company was founded in 2014 and is headquartered in Juno Beach, Florida.
PPL Company Profile
PPL Corporation, a utility holding company, delivers electricity and natural gas in the United States and the United Kingdom. The company operates through three segments: U.K. Regulated, Kentucky Regulated, and Pennsylvania Regulated. It serves approximately 414,000 electric and 328,000 natural gas customers in Louisville and adjacent areas in Kentucky; 527,000 electric customers in central, southeastern, and western Kentucky; and 28,000 electric customers in 5 counties in southwestern Virginia. The company also provides electric delivery services to approximately 1.4 million customers in Pennsylvania; operates electricity distribution networks in the United Kingdom; generates electricity from coal, gas, hydro, and solar sources in Kentucky; and sells wholesale electricity to 10 municipalities in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.
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