Analyzing Pacific Gas & Electric (NYSE:PCG) and Brookfield Renewable Partners (NYSE:BEP)

Pacific Gas & Electric (NYSE:PCG) and Brookfield Renewable Partners (NYSE:BEP) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Risk and Volatility

Pacific Gas & Electric has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Brookfield Renewable Partners has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Insider & Institutional Ownership

78.6% of Pacific Gas & Electric shares are owned by institutional investors. Comparatively, 63.2% of Brookfield Renewable Partners shares are owned by institutional investors. 0.2% of Pacific Gas & Electric shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Pacific Gas & Electric and Brookfield Renewable Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pacific Gas & Electric	1	5	7	0	2.46
Brookfield Renewable Partners	0	1	6	1	3.00

Pacific Gas & Electric presently has a consensus price target of $20.5455, indicating a potential upside of 37.61%. Brookfield Renewable Partners has a consensus price target of $30.1111, indicating a potential upside of 19.87%. Given Pacific Gas & Electric’s higher probable upside, equities analysts clearly believe Pacific Gas & Electric is more favorable than Brookfield Renewable Partners.

Profitability

This table compares Pacific Gas & Electric and Brookfield Renewable Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pacific Gas & Electric	9.95%	10.13%	2.17%
Brookfield Renewable Partners	2.28%	0.44%	0.16%

Earnings and Valuation

This table compares Pacific Gas & Electric and Brookfield Renewable Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pacific Gas & Electric	$24.42 billion	1.64	$2.51 billion	$1.09	13.70
Brookfield Renewable Partners	$6.17 billion	1.15	-$181.00 million	($0.95)	-26.44

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

Dividends

Pacific Gas & Electric pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Brookfield Renewable Partners pays an annual dividend of $1.49 per share and has a dividend yield of 5.9%. Pacific Gas & Electric pays out 9.2% of its earnings in the form of a dividend. Brookfield Renewable Partners pays out -156.8% 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. Pacific Gas & Electric has increased its dividend for 1 consecutive years and Brookfield Renewable Partners has increased its dividend for 2 consecutive years. Brookfield Renewable Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Pacific Gas & Electric beats Brookfield Renewable Partners on 12 of the 18 factors compared between the two stocks.

About Pacific Gas & Electric

PG&E Corp. operates as a holding company, which engages in generation, transmission, and distribution of electricity and natural gas to customers. It specializes in energy, utility, power, gas, electricity, solar and sustainability. The company was founded in 1995 and is headquartered in Oakland, CA.

About Brookfield Renewable Partners

Brookfield Renewable Partners L.P. owns a portfolio of renewable power generating facilities primarily in North America, Colombia, and Brazil. The company generates electricity through hydroelectric, wind, solar, distributed generation, and pumped storage, as well as renewable natural gas, carbon capture and storage, recycling, cogeneration biomass, nuclear services, and power transformation. Brookfield Renewable Partners Limited operates as the general partner of Brookfield Renewable Partners L.P. The company was formerly known as Brookfield Renewable Energy Partners L.P. and changed its name to Brookfield Renewable Partners L.P. in May 2016. Brookfield Renewable Partners L.P. was founded in 1999 and is based in Toronto, Canada. Brookfield Renewable Partners L.P operates as a subsidiary of Brookfield Corporation.