Calpine (CPN) vs. NRG Energy (NRG) Head to Head Comparison

NRG Energy (NYSE: NRG) and Calpine (NYSE:CPN) are both mid-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Earnings & Valuation

This table compares NRG Energy and Calpine’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NRG Energy $12.35 billion 0.64 -$774.00 million ($5.10) -4.86
Calpine $6.72 billion 0.81 $92.00 million ($0.07) -215.83

Calpine has lower revenue, but higher earnings than NRG Energy. Calpine is trading at a lower price-to-earnings ratio than NRG Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for NRG Energy and Calpine, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NRG Energy 0 1 6 0 2.86
Calpine 0 7 2 0 2.22

NRG Energy presently has a consensus price target of $25.00, suggesting a potential upside of 0.81%. Calpine has a consensus price target of $14.47, suggesting a potential downside of 4.24%. Given NRG Energy’s stronger consensus rating and higher probable upside, analysts clearly believe NRG Energy is more favorable than Calpine.

Dividends

NRG Energy pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Calpine does not pay a dividend. NRG Energy pays out -2.4% of its earnings in the form of a dividend.

Volatility & Risk

NRG Energy has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Calpine has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Insider and Institutional Ownership

98.1% of NRG Energy shares are owned by institutional investors. Comparatively, 86.9% of Calpine shares are owned by institutional investors. 0.3% of NRG Energy shares are owned by insiders. Comparatively, 1.2% of Calpine shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares NRG Energy and Calpine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NRG Energy -13.48% 8.82% 1.25%
Calpine -0.27% -7.68% -1.38%

Summary

NRG Energy beats Calpine on 11 of the 16 factors compared between the two stocks.

About NRG Energy

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.

About Calpine

Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. As of December 31, 2016, the Company’s portfolio consisted of two types of power generation technologies, including natural gas-fired combustion turbines, such as combined-cycle plants, and renewable geothermal conventional steam turbines. As of December 31, 2016, the Company’s portfolio included 80 power plants, including one under construction, with an aggregate generation capacity of 25,908 Megawatt (MW) and 828 MW under construction. As of December 31, 2016, it had four MW of capacity from solar power generation technology at its Vineland Solar Energy Center in New Jersey.

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