TransAlta Renewables (OTCMKTS:TRSWF – Get Free Report) and EDP Renováveis (OTCMKTS:EDRVF – Get Free Report) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.
Dividends
TransAlta Renewables pays an annual dividend of $0.83 per share and has a dividend yield of 9.2%. EDP Renováveis pays an annual dividend of $0.03 per share and has a dividend yield of 0.2%. TransAlta Renewables pays out 223.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EDP Renováveis pays out 32.3% of its earnings in the form of a dividend.
Insider and Institutional Ownership
75.9% of TransAlta Renewables shares are held by institutional investors. Comparatively, 14.0% of EDP Renováveis shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TransAlta Renewables | 0 | 2 | 1 | 0 | 2.33 |
| EDP Renováveis | 1 | 1 | 3 | 1 | 2.67 |
TransAlta Renewables currently has a consensus target price of $20.80, indicating a potential upside of 131.11%. EDP Renováveis has a consensus target price of $19.00, indicating a potential upside of 27.43%. Given TransAlta Renewables’ higher possible upside, equities analysts plainly believe TransAlta Renewables is more favorable than EDP Renováveis.
Profitability
This table compares TransAlta Renewables and EDP Renováveis’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TransAlta Renewables | N/A | N/A | N/A |
| EDP Renováveis | N/A | N/A | N/A |
Valuation & Earnings
This table compares TransAlta Renewables and EDP Renováveis’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TransAlta Renewables | N/A | N/A | N/A | $0.37 | 24.27 |
| EDP Renováveis | N/A | N/A | N/A | $0.10 | 152.39 |
TransAlta Renewables is trading at a lower price-to-earnings ratio than EDP Renováveis, indicating that it is currently the more affordable of the two stocks.
Summary
EDP Renováveis beats TransAlta Renewables on 5 of the 9 factors compared between the two stocks.
About TransAlta Renewables
TransAlta Renewables Inc. owns, develops, and operates renewable and natural gas power generation facilities and other infrastructure assets in Canada, the United States, and Australia. The company operates through Canadian Wind, Canadian Hydro, Canadian Gas, US Wind and Solar, US Gas, and Australian Gas segments. Its portfolio of assets comprises 50 renewable power generation facilities, including wind, hydro, and gas. The company was incorporated in 2013 and is headquartered in Calgary, Canada. TransAlta Renewables Inc. operates as a subsidiary of TransAlta Corporation.
About EDP Renováveis
EDP Renováveis, S.A., a renewable energy company, plans, constructs, operates, and maintains electric power generation plants. The company operates wind and solar farms. As of December 31, 2021, it had an installed capacity of 5,908 megawatts in the United States; 2,194 megawatts in Spain; 795 megawatts in Brazil; and 1,142 megawatts in Portugal. The company was incorporated in 2007 and is headquartered in Madrid, Spain. EDP Renováveis, S.A. operates as a subsidiary of EDP-Energias de Portugal, S.A.
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