NextEra Energy (NYSE:NEE) versus Datang International Power Generation (OTCMKTS:DIPGY) Critical Review

NextEra Energy (NYSE:NEE – Get Rating) and Datang International Power Generation (OTCMKTS:DIPGY – Get Rating) are both utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Institutional and Insider Ownership

76.2% of NextEra Energy shares are owned by institutional investors. 0.4% of NextEra Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares NextEra Energy and Datang International Power Generation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NextEra Energy	19.79%	12.51%	3.75%
Datang International Power Generation	N/A	N/A	N/A

Valuation and Earnings

This table compares NextEra Energy and Datang International Power Generation’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NextEra Energy	$20.96 billion	7.00	$4.15 billion	$2.09	35.33
Datang International Power Generation	$14.10 billion	0.20	$142.63 million	N/A	N/A

NextEra Energy has higher revenue and earnings than Datang International Power Generation.

Volatility & Risk

NextEra Energy has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Datang International Power Generation has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Dividends

NextEra Energy pays an annual dividend of $1.87 per share and has a dividend yield of 2.5%. Datang International Power Generation pays an annual dividend of $0.23 per share and has a dividend yield of 7.4%. NextEra Energy pays out 89.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NextEra Energy has raised its dividend for 30 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for NextEra Energy and Datang International Power Generation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NextEra Energy	0	4	8	0	2.67
Datang International Power Generation	0	0	0	0	N/A

NextEra Energy presently has a consensus price target of $91.83, suggesting a potential upside of 24.38%. Given NextEra Energy’s higher possible upside, analysts plainly believe NextEra Energy is more favorable than Datang International Power Generation.

Summary

NextEra Energy beats Datang International Power Generation on 11 of the 14 factors compared between the two stocks.

About NextEra Energy

(Get Rating)

NextEra Energy, Inc. is an electric power and energy infrastructure company. It operates through the following segments: FPL and NEER. The FPL segment engages primarily in the generation, transmission, distribution, and sale of electric energy in Florida. The NEER segment produces electricity from clean and renewable sources, including wind and solar. It provides full energy and capacity requirements services, engages in power and gas marketing and trading activities, participates in natural gas production and pipeline infrastructure development, and owns a retail electricity provider. The company was founded in 1984 and is headquartered in Juno Beach, FL.

About Datang International Power Generation

(Get Rating)

Datang International Power Generation Co., Ltd., together with its subsidiaries, engages in power generation and power plant development activities in the People's Republic of China. The company operates through Power and heat generation, Coal, and Other segments. It generates electricity through various sources, such as coal-fired, thermal, hydro, wind, nuclear, biomass, and solar. As of December 31, 2019, the company managed an installed capacity of approximately 68,278.10 MW. It also engages in heat supply; the import of power related fuel; coal mining and trading; silicon and aluminum smelting; production and sale of alumina; cargo shipping; sale of coal ash and integrated application of solid waste; power plant construction and operation; repair and testing of power equipment; research and development activities; and provision of power related technical services. The company was formerly known as Beijing Datang Power Generation Co., Ltd and changed its name to Datang International Power Generation Co, Ltd. in April 2004. The company was founded in 1994 and is headquartered in Beijing, the People's Republic of China. Datang International Power Generation Co., Ltd. is a subsidiary of China Datang Corporation Limited.