Comparing ALLETE (NYSE:ALE) and Sunnova Energy International (NYSE:NOVA)

ALLETE (NYSE:ALEGet Rating) and Sunnova Energy International (NYSE:NOVAGet Rating) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares ALLETE and Sunnova Energy International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ALLETE 12.55% 6.23% 2.87%
Sunnova Energy International -52.12% -9.95% -2.65%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ALLETE and Sunnova Energy International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ALLETE 0 1 0 0 2.00
Sunnova Energy International 0 0 12 1 3.08

ALLETE currently has a consensus price target of $60.00, indicating a potential downside of 0.65%. Sunnova Energy International has a consensus price target of $45.31, indicating a potential upside of 187.30%. Given Sunnova Energy International’s stronger consensus rating and higher probable upside, analysts clearly believe Sunnova Energy International is more favorable than ALLETE.

Valuation and Earnings

This table compares ALLETE and Sunnova Energy International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ALLETE $1.42 billion 2.27 $169.20 million $3.48 17.35
Sunnova Energy International $241.75 million 7.48 -$138.13 million ($1.25) -12.62

ALLETE has higher revenue and earnings than Sunnova Energy International. Sunnova Energy International is trading at a lower price-to-earnings ratio than ALLETE, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

70.3% of ALLETE shares are owned by institutional investors. 0.2% of ALLETE shares are owned by insiders. Comparatively, 4.2% of Sunnova Energy International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

ALLETE has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, Sunnova Energy International has a beta of 2.28, indicating that its stock price is 128% more volatile than the S&P 500.

Summary

ALLETE beats Sunnova Energy International on 8 of the 15 factors compared between the two stocks.

ALLETE Company Profile (Get Rating)

ALLETE, Inc. operates as an energy company. The company operates through Regulated Operations, ALLETE Clean Energy, and Corporate and Other segments. It generates electricity from coal-fired, biomass co-fired / natural gas, hydroelectric, wind, and solar. The company provides regulated utility electric services in northwestern Wisconsin to approximately 15,000 electric customers, 13,000 natural gas customers, and 10,000 water customers, as well as regulated utility electric services in northeastern Minnesota to approximately 145,000 retail customers and 15 non-affiliated municipal customers. It also owns and maintains electric transmission assets in Wisconsin, Michigan, Minnesota, and Illinois. In addition, the company focuses on developing, acquiring, and operating clean and renewable energy projects; and owns and operates approximately 1,000 megawatts of wind energy generation facility. Further, it is involved in the coal mining operations in North Dakota; and real estate investment activities in Florida. The company owns and operates 158 substations with a total capacity of 10,066 megavolt amperes. It serves taconite mining, paper, pulp and secondary wood products, pipeline, and other industries. The company was formerly known as Minnesota Power, Inc. and changed its name to ALLETE, Inc. in May 2001. ALLETE, Inc. was incorporated in 1906 and is headquartered in Duluth, Minnesota.

Sunnova Energy International Company Profile (Get Rating)

Sunnova Energy International Inc. provides residential energy services in the United States. The company offers electricity, as well as offers operations and maintenance, monitoring, repairs and replacements, equipment upgrades, on-site power optimization, and diagnostics services. As of December 31, 2021, it operated a fleet of residential solar energy systems with a generation capacity of approximately 1,140 megawatts serving over 195,000 customers. Sunnova Energy International Inc. was incorporated in 2012 and is headquartered in Houston, Texas.

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