Atlantica Yield PLC (NASDAQ: ABY) and CPFL Energia (NYSE:CPL) are both mid-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitabiliy, analyst recommendations, institutional ownership, earnings, risk and valuation.

Profitability

This table compares Atlantica Yield PLC and CPFL Energia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield PLC 0.97% 0.48% 0.09%
CPFL Energia 4.34% 8.52% 2.22%

Volatility and Risk

Atlantica Yield PLC has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, CPFL Energia has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Valuation & Earnings

This table compares Atlantica Yield PLC and CPFL Energia’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atlantica Yield PLC $970.02 million 2.17 $677.13 million $0.09 232.89
CPFL Energia $6.15 billion 1.40 $1.24 billion N/A N/A

CPFL Energia has higher revenue and earnings than Atlantica Yield PLC.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Atlantica Yield PLC and CPFL Energia, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield PLC 0 1 2 1 3.00
CPFL Energia 0 1 0 0 2.00

Atlantica Yield PLC currently has a consensus target price of $22.33, suggesting a potential upside of 6.55%. Given Atlantica Yield PLC’s stronger consensus rating and higher possible upside, analysts clearly believe Atlantica Yield PLC is more favorable than CPFL Energia.

Insider & Institutional Ownership

54.4% of Atlantica Yield PLC shares are owned by institutional investors. Comparatively, 1.9% of CPFL Energia shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Atlantica Yield PLC pays an annual dividend of $1.00 per share and has a dividend yield of 4.8%. CPFL Energia pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. Atlantica Yield PLC pays out 1,111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Atlantica Yield PLC has increased its dividend for 3 consecutive years. Atlantica Yield PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Atlantica Yield PLC beats CPFL Energia on 9 of the 16 factors compared between the two stocks.

Atlantica Yield PLC Company Profile

Atlantica Yield plc, formerly Abengoa Yield plc, is a total return company. The Company owns, manages, and acquires renewable energy, conventional power, electric transmission lines and water assets, focused on North America (the United States and Mexico), South America (Peru, Chile, Brazil and Uruguay) and Europe, Middle East and Africa (Spain, Algeria and South Africa). Its segments include North America, South America and EMEA. It operates in business sectors, including renewable energy, conventional power, electric transmission lines and water. As of December 31, 2016, it owned or had interests in 21 assets, comprising 1,442 megawatt (MW) of renewable energy generation, 300 MW of conventional power generation, 1,099 miles of electric transmission lines, as well as an exchangeable preferred equity investment in Abengoa Concessoes Brasil Holding S.A., (ACBH). The renewable energy sector includes its activities related to the production electricity from solar power and wind plants.

CPFL Energia Company Profile

CPFL Energia S.A. is a holding company. The Company, through its subsidiaries, distributes, generates, transmits and commercializes electricity in Brazil, as well as provides energy-related services. Its segments include Distribution, Conventional Generation Sources, Renewable Energy Generation, Commercialization and Services. The Company operates its distribution segment through its eight distributors. Its installed capacity in conventional generation is approximately 2,200 megawatt (MW). The Company, through its subsidiary CPFL Geracao, holds equity interests in eight Hydroelectric Power Plants. It operates in the segment of generation of energy of renewable sources, such as wind, biomass thermal plants, SHPPs and solar, through its subsidiary, CPFL Renovaveis. The Company operates in the segment of commercialization (power competitive supply) through its subsidiary, CPFL Brasil. The Company operates in the segment of value-added services providing electricity-related services.

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