Critical Survey: Companhia Paranaense de Energia – Copel (NYSE:ELPC) & RWE (OTCMKTS:RWEOY)

RWE (OTCMKTS:RWEOY) and Companhia Paranaense de Energia – Copel (NYSE:ELPC) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings for RWE and Companhia Paranaense de Energia – Copel, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RWE	0	3	1	1	2.60
Companhia Paranaense de Energia – Copel	0	2	1	1	2.75

RWE currently has a consensus target price of $53.30, suggesting a potential downside of 16.86%. Companhia Paranaense de Energia – Copel has a consensus target price of $10.40, suggesting a potential downside of 11.28%. Given Companhia Paranaense de Energia – Copel’s stronger consensus rating and higher probable upside, analysts clearly believe Companhia Paranaense de Energia – Copel is more favorable than RWE.

Volatility and Risk

RWE has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Companhia Paranaense de Energia – Copel has a beta of -0.11, meaning that its share price is 111% less volatile than the S&P 500.

Valuation & Earnings

This table compares RWE and Companhia Paranaense de Energia – Copel”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RWE	$19.94 billion	2.33	$3.54 billion	$4.88	13.14
Companhia Paranaense de Energia – Copel	$4.68 billion	1.87	$409.35 million	$0.55	21.31

RWE has higher revenue and earnings than Companhia Paranaense de Energia – Copel. RWE is trading at a lower price-to-earnings ratio than Companhia Paranaense de Energia – Copel, indicating that it is currently the more affordable of the two stocks.

Dividends

RWE pays an annual dividend of $0.87 per share and has a dividend yield of 1.4%. Companhia Paranaense de Energia – Copel pays an annual dividend of $0.69 per share and has a dividend yield of 5.9%. RWE pays out 17.8% of its earnings in the form of a dividend. Companhia Paranaense de Energia – Copel pays out 125.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares RWE and Companhia Paranaense de Energia – Copel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RWE	17.96%	4.96%	1.88%
Companhia Paranaense de Energia – Copel	N/A	N/A	N/A

Summary

RWE beats Companhia Paranaense de Energia – Copel on 9 of the 13 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 Companhia Paranaense de Energia – Copel

Companhia Paranaense de Energia – COPEL engages in the generation, transformation, distribution, and sale of electricity to industrial, residential, commercial, rural, and other customers in Brazil. The company operates through Power Generation and Transmission, Power Distribution, GAS, Power Sale, and Holding and Services segments. It is also involved in the piped natural gas distribution. The company operates hydroelectric, wind, and thermoelectric plants; and owns and operates transmission and distribution lines. It holds concessions to distribute electricity in municipalities in the State of Paraná and in the municipality of Porto União in the State of Santa Catarina. Companhia Paranaense de Energia COPEL was founded in 1954 and is headquartered in Curitiba, Brazil.