Avista Corporation (NYSE: AVA) and CenterPoint Energy (NYSE:CNP) are both mid-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitabiliy, dividends, valuation, analyst recommendations, risk and earnings.

Profitability

This table compares Avista Corporation and CenterPoint Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avista Corporation 9.70% 8.61% 2.71%
CenterPoint Energy 5.68% 15.20% 2.45%

Insider & Institutional Ownership

69.6% of Avista Corporation shares are held by institutional investors. Comparatively, 77.4% of CenterPoint Energy shares are held by institutional investors. 1.1% of Avista Corporation shares are held by insiders. Comparatively, 0.2% of CenterPoint Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Avista Corporation has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, CenterPoint Energy has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Avista Corporation and CenterPoint Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avista Corporation 0 3 0 0 2.00
CenterPoint Energy 1 6 1 0 2.00

Avista Corporation presently has a consensus price target of $37.00, suggesting a potential downside of 13.43%. CenterPoint Energy has a consensus price target of $27.00, suggesting a potential downside of 2.81%. Given CenterPoint Energy’s higher probable upside, analysts clearly believe CenterPoint Energy is more favorable than Avista Corporation.

Dividends

Avista Corporation pays an annual dividend of $1.43 per share and has a dividend yield of 3.3%. CenterPoint Energy pays an annual dividend of $1.07 per share and has a dividend yield of 3.9%. Avista Corporation pays out 65.0% of its earnings in the form of a dividend. CenterPoint Energy pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avista Corporation has increased its dividend for 11 consecutive years and CenterPoint Energy has increased its dividend for 14 consecutive years. CenterPoint Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Avista Corporation and CenterPoint Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avista Corporation $1.46 billion 1.88 $477.96 million $2.20 19.43
CenterPoint Energy $8.28 billion 1.45 $2.08 billion $1.07 25.96

CenterPoint Energy has higher revenue and earnings than Avista Corporation. Avista Corporation is trading at a lower price-to-earnings ratio than CenterPoint Energy, indicating that it is currently the more affordable of the two stocks.

Summary

CenterPoint Energy beats Avista Corporation on 10 of the 16 factors compared between the two stocks.

About Avista Corporation

Avista Corporation is an electric and natural gas utility company. The Company operates through two segments: Avista Utilities, and Alaska Electric Light and Power Company (AEL&P). The Company’s regional services include government and higher education, medical services, retail trade and finance. The Company’s businesses also include sheet metal fabrication, venture fund investments, real estate investments, a company that explores markets that could be served with liquefied natural gas (LNG), as well as certain other investments of Avista Capital, which is a subsidiary of the Company. Avista Utilities is an operating division of the Company, which consists of its regulated utility operations in the Pacific Northwest. Avista Utilities division generates, transmits and distributes electricity, and distributes natural gas. As of December 31, 2016, AEL&P operated five hydroelectric generation facilities with 102.7 megawatts (MW) of hydroelectric generation capacity.

About CenterPoint Energy

CenterPoint Energy, Inc. is a public utility holding company. The Company, through its subsidiaries, owns and operates electric transmission and distribution facilities, and natural gas distribution facilities. The Electric Transmission & Distribution segment provides electric transmission and distribution services to retail electric providers. Its Natural Gas Distribution segment offers intrastate natural gas sales to and natural gas transportation and distribution for residential, commercial and industrial customers. Its Energy Services segment includes non-rate regulated gas sales and transportation and storage services for commercial and industrial customers. Its Midstream Investments segment includes equity investment in Enable that owns, operates and develops natural gas and crude oil assets. Its Other Operations segment includes office buildings and other real estate used in its business operations and other corporate operations.

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