National Grid Transco (NYSE:NGG – Get Free Report) and Algonquin Power & Utilities (NYSE:AQN – Get Free Report) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.
Valuation and Earnings
This table compares National Grid Transco and Algonquin Power & Utilities”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National Grid Transco | $23.61 billion | 3.27 | $3.70 billion | N/A | N/A |
| Algonquin Power & Utilities | $2.32 billion | 2.06 | -$1.38 billion | ($0.04) | -155.38 |
Analyst Ratings
This is a breakdown of recent recommendations and price targets for National Grid Transco and Algonquin Power & Utilities, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Grid Transco | 2 | 5 | 4 | 0 | 2.18 |
| Algonquin Power & Utilities | 1 | 7 | 3 | 0 | 2.18 |
National Grid Transco presently has a consensus target price of $83.80, indicating a potential upside of 7.70%. Algonquin Power & Utilities has a consensus target price of $6.55, indicating a potential upside of 5.39%. Given National Grid Transco’s higher probable upside, research analysts plainly believe National Grid Transco is more favorable than Algonquin Power & Utilities.
Profitability
This table compares National Grid Transco and Algonquin Power & Utilities’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Grid Transco | N/A | N/A | N/A |
| Algonquin Power & Utilities | -1.11% | 5.14% | 1.84% |
Insider & Institutional Ownership
4.7% of National Grid Transco shares are held by institutional investors. Comparatively, 62.3% of Algonquin Power & Utilities shares are held by institutional investors. 0.1% of Algonquin Power & Utilities shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Risk & Volatility
National Grid Transco has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Algonquin Power & Utilities has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.
Dividends
National Grid Transco pays an annual dividend of $2.11 per share and has a dividend yield of 2.7%. Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.2%. Algonquin Power & Utilities pays out -650.0% of its earnings in the form of a dividend.
Summary
National Grid Transco beats Algonquin Power & Utilities on 7 of the 13 factors compared between the two stocks.
About National Grid Transco
National Grid plc transmits and distributes electricity and gas. It operates through UK Electricity Transmission, UK Electricity Distribution, UK Electricity System Operator, New England, New York, National Grid Ventures, and Other segments. The UK Electricity Transmission segment provides electricity transmission and construction work services in England and Wales. The UK Electricity Distribution segment offers electricity distribution services in Midlands, and South West of England and South Wales. The UK Electricity System Operator segment provides balancing services for supply and demand of electricity on Great Britain’s electricity transmission system; and acts as an agent on behalf of transmission operators. The New England segment offers electricity and gas distribution, and electricity transmission services in New England. The New York segment provides electricity and gas distribution, and electricity transmission services in New York. The National Grid Ventures segment provides transmission services through electricity interconnectors and LNG importation at the Isle of Grain, as well as sale of renewables projects. The Other segment engages in the leasing and sale of commercial property, as well as insurance activities in the United Kingdom. The company was founded in 1990 and is headquartered in London, the United Kingdom.
About Algonquin Power & Utilities
Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.
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