NRG Energy (NYSE: NRG) and Cleco Corporate Holdings (NYSE:CNL) are both mid-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.
Volatility & Risk
NRG Energy has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Cleco Corporate Holdings has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.
Valuation & Earnings
This table compares NRG Energy and Cleco Corporate Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|NRG Energy||$12.35 billion||0.76||-$774.00 million||($5.10)||-5.78|
|Cleco Corporate Holdings||N/A||N/A||N/A||$2.20||25.17|
Cleco Corporate Holdings has higher revenue, but lower earnings than NRG Energy. NRG Energy is trading at a lower price-to-earnings ratio than Cleco Corporate Holdings, indicating that it is currently the more affordable of the two stocks.
This table compares NRG Energy and Cleco Corporate Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cleco Corporate Holdings||8.24%||5.05%||1.60%|
This is a summary of recent ratings and target prices for NRG Energy and Cleco Corporate Holdings, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cleco Corporate Holdings||0||0||0||0||N/A|
NRG Energy presently has a consensus target price of $25.00, suggesting a potential downside of 15.23%. Given NRG Energy’s higher probable upside, analysts plainly believe NRG Energy is more favorable than Cleco Corporate Holdings.
NRG Energy pays an annual dividend of $0.12 per share and has a dividend yield of 0.4%. Cleco Corporate Holdings pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. NRG Energy pays out -2.4% of its earnings in the form of a dividend. Cleco Corporate Holdings pays out 72.7% 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. Cleco Corporate Holdings has increased its dividend for 7 consecutive years. Cleco Corporate Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
91.8% of NRG Energy shares are held by institutional investors. 0.3% of NRG Energy shares are held by 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.
NRG Energy beats Cleco Corporate Holdings on 8 of the 13 factors compared between the two stocks.
NRG Energy Company Profile
NRG Energy, Inc. (NRG) is an integrated power company. The Company is engaged in producing, selling and delivering electricity and related products and services in various markets in the United States. The Company’s segments include Generation, Retail, Renewables, NRG Yield, Inc. (NRG Yield) and Corporate activities. The Generation segment includes generation, international and Boston Energy Trading and Marketing LLC (BETM). The Retail segment includes Mass customers and Business Solutions. Its Business Solutions include commercial, industrial and governmental/institutional (C&I) customers, and other distributed and reliability products. The Renewables segment includes solar and wind assets. The NRG Yield segment includes certain of the Company’s contracted generation assets. The corporate activities segment includes residential solar and electric vehicle services. The Company owned and operated approximately 47,000 megawatts (MW) of generation, as of December 31, 2016.
Cleco Corporate Holdings Company Profile
Cleco Corporate Holdings LLC, formerly Cleco Corporation, is a public utility holding company. The Company’s segments include Cleco Power and Other. Cleco Power is a regulated electric utility company that owns over 10 generating units with a total nameplate capacity of approximately 3,330 megawatts (MW) and serves approximately 287,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana and Mississippi. The Company, through its subsidiaries, owns one transmission substation in Louisiana and one transmission substation in Mississippi. Cleco Power is engaged in the generation, transmission, distribution and sale of electricity within Louisiana. It owns natural gas pipelines and interconnections at all of its generating facilities, which allow it to access various natural gas supply markets and maintain an economical fuel supply for its customers. The Company holds investments in its subsidiary, Cleco Power LLC (Cleco Power).
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