Algonquin Power & Utilities (NYSE:AQN) and E.On (OTCMKTS:EONGY) Head-To-Head Analysis

Algonquin Power & Utilities (NYSE:AQN) and E.On (OTCMKTS:EONGY) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Insider and Institutional Ownership

62.3% of Algonquin Power & Utilities shares are owned by institutional investors. 0.1% of Algonquin Power & Utilities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Algonquin Power & Utilities and E.On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Algonquin Power & Utilities	5.77%	5.16%	1.79%
E.On	4.49%	11.54%	2.72%

Risk & Volatility

Algonquin Power & Utilities has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, E.On has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Earnings & Valuation

This table compares Algonquin Power & Utilities and E.On”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Algonquin Power & Utilities	$2.43 billion	1.85	$180.80 million	$0.19	30.71
E.On	$89.03 billion	0.59	$1.96 billion	$1.50	13.49

E.On has higher revenue and earnings than Algonquin Power & Utilities. E.On is trading at a lower price-to-earnings ratio than Algonquin Power & Utilities, indicating that it is currently the more affordable of the two stocks.

Dividends

Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.5%. E.On pays an annual dividend of $0.49 per share and has a dividend yield of 2.4%. Algonquin Power & Utilities pays out 136.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. E.On pays out 32.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Algonquin Power & Utilities and E.On, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algonquin Power & Utilities	0	5	6	0	2.55
E.On	0	6	2	0	2.25

Algonquin Power & Utilities currently has a consensus price target of $6.81, indicating a potential upside of 16.63%. Given Algonquin Power & Utilities’ stronger consensus rating and higher probable upside, analysts plainly believe Algonquin Power & Utilities is more favorable than E.On.

Summary

Algonquin Power & Utilities beats E.On on 9 of the 16 factors compared between the two stocks.

About Algonquin Power & Utilities

Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.

About E.On

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, rest of Europe, and internationally. It operates through two segments, Energy Networks and Customer Solutions. The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services. The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities. Additionally, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties. The company was founded in 1923 and is headquartered in Essen, Germany.