Head-To-Head Comparison: Kenon (NYSE:KEN) and National Grid Transco (NYSE:NGG)

Kenon (NYSE:KEN) and National Grid Transco (NYSE:NGG) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

Kenon has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, National Grid Transco has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Kenon and National Grid Transco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kenon	0	1	0	0	2.00
National Grid Transco	2	7	1	0	1.90

National Grid Transco has a consensus price target of $85.50, suggesting a potential upside of 1.85%. Given National Grid Transco’s higher possible upside, analysts clearly believe National Grid Transco is more favorable than Kenon.

Dividends

Kenon pays an annual dividend of $3.85 per share and has a dividend yield of 5.8%. National Grid Transco pays an annual dividend of $4.31 per share and has a dividend yield of 5.1%. Kenon pays out 370.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kenon has increased its dividend for 2 consecutive years. Kenon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Kenon and National Grid Transco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kenon	7.98%	3.47%	2.01%
National Grid Transco	N/A	N/A	N/A

Institutional and Insider Ownership

13.4% of Kenon shares are held by institutional investors. Comparatively, 4.7% of National Grid Transco shares are held by institutional investors. 0.1% of Kenon shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Kenon and National Grid Transco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kenon	$871.63 million	3.94	$66.27 million	$1.04	63.37
National Grid Transco	$23.71 billion	3.68	$4.34 billion	N/A	N/A

National Grid Transco has higher revenue and earnings than Kenon.

Summary

Kenon beats National Grid Transco on 10 of the 15 factors compared between the two stocks.

About Kenon

Kenon Holdings Ltd., through its subsidiaries, operates as an owner, developer, and operator of power generation facilities in Israel, the United States, and internationally. It operates through OPC Power Plants, CPV Group, and ZIM segments. The company engages in the generation and supply of electricity and energy; development, construction, and management of solar and wind energy, and conventional natural gas-fired power plants; and provision of container liner shipping services. It also operates a fleet of 150 vessels. Kenon Holdings Ltd. was incorporated in 2014 and is based in Singapore. Kenon Holdings Ltd. operates as a subsidiary of Ansonia Holdings Singapore B.V.

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.