Critical Review: RWE (OTCMKTS:RWEOY) vs. Enel Chile (NYSE:ENIC)

RWE (OTCMKTS:RWEOY) and Enel Chile (NYSE:ENIC) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Dividends

RWE pays an annual dividend of $0.88 per share and has a dividend yield of 2.0%. Enel Chile pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. RWE pays out 15.1% of its earnings in the form of a dividend. Enel Chile pays out 7.1% 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.

Earnings & Valuation

This table compares RWE and Enel Chile”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RWE	$26.22 billion	N/A	$5.56 billion	$5.82	7.64
Enel Chile	$4.39 billion	N/A	$159.62 million	$0.14	23.68

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

Volatility & Risk

RWE has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Enel Chile has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for RWE and Enel Chile, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RWE	0	0	1	1	3.50
Enel Chile	0	2	0	0	2.00

Enel Chile has a consensus target price of $3.90, suggesting a potential upside of 17.65%. Given Enel Chile’s higher probable upside, analysts clearly believe Enel Chile is more favorable than RWE.

Profitability

This table compares RWE and Enel Chile’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RWE	16.82%	5.78%	2.05%
Enel Chile	4.27%	3.21%	1.32%

Institutional & Insider Ownership

3.2% of Enel Chile shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

RWE beats Enel Chile on 10 of the 15 factors compared between the two stocks.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.

About Enel Chile

Enel Chile S.A., an electricity utility company, engages in the generation, transmission, and distribution of electricity in Chile. The company operates through Generation, and Distribution and Networks Segments. It generates electricity through various sources, such as hydroelectric, thermal, wind, solar, and geothermal power plants. It distributes electricity in various municipalities of the Santiago metropolitan region. The company also engages in the sale and transportation of natural gas, and provision of engineering consulting services. It serves residential, commercial, industrial, and other customers. The company was formerly known as Enersis Chile S.A. and changed its name to Enel Chile S.A. in October 2016. The company was incorporated in 2016 and is headquartered in Santiago, Chile. Enel Chile S.A. (SNSE:ENELCHILE) operates as a subsidiary of Enel SpA (BIT:ENEL).