Capital Power (OTCMKTS:CPXWF) and TransAlta (NYSE:TAC) Critical Survey

TransAlta (NYSE:TACGet Free Report) and Capital Power (OTCMKTS:CPXWFGet Free Report) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Dividends

TransAlta pays an annual dividend of $0.16 per share and has a dividend yield of 1.7%. Capital Power pays an annual dividend of $1.29 per share and has a dividend yield of 4.1%. TransAlta pays out 22.9% of its earnings in the form of a dividend. Capital Power pays out 136.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for TransAlta and Capital Power, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TransAlta 0 0 3 0 3.00
Capital Power 0 0 0 0 N/A

TransAlta currently has a consensus price target of $15.10, suggesting a potential upside of 62.19%. Capital Power has a consensus price target of $42.40, suggesting a potential upside of 35.90%. Given TransAlta’s higher possible upside, analysts plainly believe TransAlta is more favorable than Capital Power.

Profitability

This table compares TransAlta and Capital Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TransAlta 7.95% 21.41% 2.73%
Capital Power N/A N/A N/A

Valuation & Earnings

This table compares TransAlta and Capital Power’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TransAlta $3.50 billion 0.70 $38.46 million $0.70 13.30
Capital Power N/A N/A N/A $0.94 33.18

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

Institutional and Insider Ownership

64.9% of TransAlta shares are held by institutional investors. Comparatively, 29.4% of Capital Power shares are held by institutional investors. 13.1% of TransAlta 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.

Summary

TransAlta beats Capital Power on 9 of the 12 factors compared between the two stocks.

About TransAlta

(Get Free Report)

TransAlta Corporation engages in the development, production, and sale of electric energy. It operates through Hydro, Wind and Solar, Gas, Energy Transition, and Energy Marketing segments. The Hydro segment has a net ownership interest of approximately 922 megawatts (MW) of owned hydro electrical-generating capacity located in Alberta, British Columbia, and Ontario. The Wind and Solar segment has a net ownership interest of approximately 1,878 MW of owned wind and solar electrical-generating capacity, as well as battery storage facilities located in Alberta, Ontario, New Brunswick, and Qu├ębec in Canada; and the states of Massachusetts, Minnesota, New Hampshire, North Carolina, Pennsylvania, Washington, and Wyoming in the United States. The Gas segment has a net ownership interest of approximately 2,775 MW of owned gas electrical-generating capacity, and facilities located in Alberta and Ontario in Canada; Michigan, the United States; and Western Australia. The Energy Transition segment has a net ownership interest of approximately 671 MW of owned coal electrical-generating capacity, as well as operates the Skookumchuck hydro facility in Centralia; and engages in the highvale mine and the mine reclamation activities. The Energy Marketing segment is involved in the trading of power, natural gas, and environmental products. It serves customers in various industry segments, including commercial real estate, municipal, manufacturing, industrial, hospitality, finance, and oil and gas. The company was founded in 1909 and is headquartered in Calgary, Canada.

About Capital Power

(Get Free Report)

Capital Power Corporation develops, acquires, owns, and operates renewable and thermal power generation facilities in Canada and the United States. It generates electricity from various energy sources, including wind, solar, waste heat, natural gas, and coal. The company owns an approximately 7,500 megawatts of power generation capacity at 29 facilities. It also manages its related electricity, natural gas, and emissions portfolios by undertaking trading and marketing activities. Capital Power Corporation was founded in 1891 and is headquartered in Edmonton, Canada.

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