AGL Energy (OTCMKTS:AGLNF – Get Rating) and NRG Energy (NYSE:NRG – Get Rating) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.
Institutional and Insider Ownership
15.3% of AGL Energy shares are owned by institutional investors. Comparatively, 98.3% of NRG Energy shares are owned by institutional investors. 0.9% of NRG Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Profitability
This table compares AGL Energy and NRG Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AGL Energy | N/A | N/A | N/A |
| NRG Energy | -5.90% | 17.12% | 2.28% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AGL Energy | 0 | 0 | 2 | 0 | 3.00 |
| NRG Energy | 1 | 2 | 2 | 0 | 2.20 |
NRG Energy has a consensus target price of $41.25, indicating a potential upside of 21.75%. Given NRG Energy’s higher possible upside, analysts plainly believe NRG Energy is more favorable than AGL Energy.
Dividends
AGL Energy pays an annual dividend of $0.60 per share and has a dividend yield of 9.1%. NRG Energy pays an annual dividend of $1.51 per share and has a dividend yield of 4.5%. AGL Energy pays out 59.2% of its earnings in the form of a dividend. NRG Energy pays out -19.0% 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. NRG Energy has increased its dividend for 4 consecutive years.
Earnings and Valuation
This table compares AGL Energy and NRG Energy’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AGL Energy | N/A | N/A | N/A | $1.02 | 6.52 |
| NRG Energy | $31.54 billion | 0.25 | $1.22 billion | ($7.93) | -4.27 |
NRG Energy has higher revenue and earnings than AGL Energy. NRG Energy is trading at a lower price-to-earnings ratio than AGL Energy, indicating that it is currently the more affordable of the two stocks.
Summary
NRG Energy beats AGL Energy on 8 of the 13 factors compared between the two stocks.
About AGL Energy
AGL Energy Limited supplies energy and other services to residential, small and large businesses, and wholesale customers in Australia. It operates through three segments: Customer Markets, Integrated Energy, and Investments. The company engages in generating electricity through coal and gas-fired generation, thermal, hydro, wind, batteries, and solar power plants; gas storage activities; and the retail sale of electricity, gas, broadband/mobile/voice, solar, and energy efficiency products and services. It operates electricity generation portfolio of 10,330 megawatts; the Newcastle gas storage facility in New South Wales; the Silver Springs underground gas storage facility in Queensland; natural gas production assets at Camden in New South Wales; and the North Queensland gas assets. The company serves 4.2 million customer accounts. AGL Energy Limited was founded in 1837 and is based in Sydney, Australia.
About NRG Energy
NRG Energy, Inc., together with its subsidiaries, operates as an integrated power company in the United States. It operates through Texas, East, and West segments. The company is involved in producing and selling electricity and related products and services to approximately residential, commercial, industrial, and wholesale customers. It generates electricity using natural gas, coal, oil, solar, nuclear, and battery storage. The company also provides system power, distributed generation, renewable products, backup generation, storage and distributed solar, demand response, and energy efficiency and advisory services, as well as carbon management and specialty services. In addition, it trades in electric power, natural gas, and related commodities; environmental products; weather products; and financial products, including forwards, futures, options, and swaps. Further, the company procures fuels; and sells energy, services, and products and services under the NRG, Reliant, Direct Energy, Green Mountain Energy, Stream, and XOOM Energy. NRG Energy, Inc. was founded in 1989 and is headquartered in Houston, Texas.
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