Comparing Ormat Technologies (NYSE:ORA) & Brookfield Renewable (NYSE:BEPC)

Ormat Technologies (NYSE:ORA) and Brookfield Renewable (NYSE:BEPC) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Dividends

Ormat Technologies pays an annual dividend of $0.48 per share and has a dividend yield of 0.7%. Brookfield Renewable pays an annual dividend of $1.35 per share and has a dividend yield of 5.2%. Ormat Technologies pays out 26.4% of its earnings in the form of a dividend. Brookfield Renewable pays out -275.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Brookfield Renewable has raised its dividend for 2 consecutive years. Brookfield Renewable is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Ormat Technologies and Brookfield Renewable’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ormat Technologies	$793.57 million	4.92	$65.84 million	$1.82	35.55
Brookfield Renewable	$4.71 billion	0.99	$1.50 billion	($0.49)	-52.92

Brookfield Renewable has higher revenue and earnings than Ormat Technologies. Brookfield Renewable is trading at a lower price-to-earnings ratio than Ormat Technologies, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Ormat Technologies has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Brookfield Renewable has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Ormat Technologies and Brookfield Renewable, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ormat Technologies	0	4	4	0	2.50
Brookfield Renewable	0	0	2	0	3.00

Ormat Technologies currently has a consensus target price of $89.14, suggesting a potential upside of 37.78%. Brookfield Renewable has a consensus target price of $34.00, suggesting a potential upside of 31.12%. Given Ormat Technologies’ higher possible upside, research analysts clearly believe Ormat Technologies is more favorable than Brookfield Renewable.

Profitability

This table compares Ormat Technologies and Brookfield Renewable’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ormat Technologies	13.45%	5.35%	2.50%
Brookfield Renewable	8.39%	2.47%	0.94%

Institutional & Insider Ownership

88.2% of Ormat Technologies shares are held by institutional investors. Comparatively, 66.2% of Brookfield Renewable shares are held by institutional investors. 1.0% of Ormat Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Ormat Technologies beats Brookfield Renewable on 10 of the 17 factors compared between the two stocks.

About Ormat Technologies

Ormat Technologies, Inc. engages in the geothermal and recovered energy power business in the United States, Indonesia, Kenya, Turkey, Chile, Guadeloupe, Guatemala, Ethiopia, New Zealand, Honduras, and internationally. It operates through three segments: Electricity, Product, and Energy Storage. The Electricity segment develops, builds, owns, and operates geothermal, solar photovoltaic, and recovered energy-based power plants; and sells electricity. The Product segment designs, manufactures, and sells equipment for geothermal, recovered energy-based electricity generation; and provides services relating to the engineering, procurement, construction, operation, and maintenance of geothermal and recovered energy-based power plants. The Product segment serves contractors; developers, owners, and operators of geothermal power plants; and owners and operators of interstate natural gas pipelines, gas processing plants, and cement plants, as well as companies in other energy-intensive industrial processes. The Energy Storage segment offers energy storage and related services, as well as services relating to the engineering, procurement, construction, operation, and maintenance of energy storage units. Ormat Technologies, Inc. was founded in 1965 and is based in Reno, Nevada.

About Brookfield Renewable

Brookfield Renewable Corporation owns and operates a portfolio of renewable power and sustainable solution assets primarily in the United States, Europe, Colombia, and Brazil. It operates hydroelectric, wind, and solar power plants with an installed capacity of approximately 12,857 megawatts. The company was incorporated in 2019 and is headquartered in New York, New York.