Head to Head Comparison: Atlantic Power (AT) vs. Covanta (CVA)

Atlantic Power (NYSE: AT) and Covanta (NYSE:CVA) are both small-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Analyst Recommendations

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This is a summary of current ratings for Atlantic Power and Covanta, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantic Power 0 2 0 0 2.00
Covanta 0 2 5 0 2.71



Atlantic Power currently has a consensus target price of $2.50, suggesting a potential upside of 13.64%. Covanta has a consensus target price of $17.29, suggesting a potential upside of 11.52%. Given Atlantic Power’s higher possible upside, equities research analysts clearly believe Atlantic Power is more favorable than Covanta.

Dividends

Covanta pays an annual dividend of $1.00 per share and has a dividend yield of 6.5%. Atlantic Power does not pay a dividend. Covanta pays out -270.3% of its earnings in the form of a dividend.

Risk and Volatility

Atlantic Power has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500. Comparatively, Covanta has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Earnings and Valuation

This table compares Atlantic Power and Covanta’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantic Power $431.00 million 0.59 -$93.00 million ($0.29) -7.59
Covanta $1.75 billion 1.16 $57.00 million ($0.37) -41.89

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

Profitability

This table compares Atlantic Power and Covanta’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantic Power -21.88% 36.16% 0.81%
Covanta 3.25% -13.02% -1.10%

Insider and Institutional Ownership

49.5% of Atlantic Power shares are held by institutional investors. Comparatively, 91.8% of Covanta shares are held by institutional investors. 1.6% of Atlantic Power shares are held by company insiders. Comparatively, 10.9% of Covanta shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Covanta beats Atlantic Power on 10 of the 16 factors compared between the two stocks.

About Atlantic Power

Atlantic Power Corporation owns and operates a fleet of power generation assets in the United States and Canada. As of December 31, 2017, its power generation projects had an aggregate gross electric generation capacity of approximately 1,633 megawatts consisting of interests in 18 operational power generation projects across 9 states in the United States and 2 provinces in Canada. The company sells its electricity to utilities and other customers. Atlantic Power Corporation was founded in 2004 and is headquartered in Dedham, Massachusetts.

About Covanta

Covanta Holding Corporation, through its subsidiaries, provides waste and energy services to municipal entities primarily in the United States and Canada. It owns and operates infrastructure for the conversion of waste to energy, as well as engages in related waste transport and disposal, and other renewable energy production businesses. The company disposes waste and generates electricity and/or steam; sells metal recovered during the energy-from-waste (EfW) process; and offers waste management solutions, such as site clean-up, wastewater treatment, transportation and logistics, recycling, and depackaging. It owns and operates 43 EfW facilities; and 5 additional energy generation facilities, including wood biomass and hydroelectric renewable energy production facilities in North America. The company also owns and operates 17 transfer stations, 19 material processing facilities, 1 regional metals recycling facility, and 4 landfills. Covanta Holding Corporation has a strategic partnership with the Green Investment Group Limited to develop, fund, and own EfW projects in Ireland and the United Kingdom. The company was formerly known as Danielson Holding Corporation and changed its name to Covanta Holding Corporation in September 2005. Covanta Holding Corporation was founded in 1960 and is headquartered in Morristown, New Jersey.

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