Contrasting TransAlta Corporation (TAC) and Azure Power Global (AZRE)
TransAlta Corporation (NYSE: TAC) and Azure Power Global (NYSE:AZRE) are both small-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.
Earnings & Valuation
This table compares TransAlta Corporation and Azure Power Global’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TransAlta Corporation||$1.91 billion||0.91||$725.42 million||$0.09||67.23|
|Azure Power Global||$78.96 million||4.68||$55.35 million||($2.39)||-5.96|
TransAlta Corporation has higher revenue and earnings than Azure Power Global. Azure Power Global is trading at a lower price-to-earnings ratio than TransAlta Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares TransAlta Corporation and Azure Power Global’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Azure Power Global||-18.15%||-9.96%||-1.76%|
This is a breakdown of recent recommendations for TransAlta Corporation and Azure Power Global, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Azure Power Global||0||0||3||0||3.00|
TransAlta Corporation currently has a consensus price target of $7.00, indicating a potential upside of 15.70%. Azure Power Global has a consensus price target of $22.00, indicating a potential upside of 54.39%. Given Azure Power Global’s stronger consensus rating and higher possible upside, analysts clearly believe Azure Power Global is more favorable than TransAlta Corporation.
Insider & Institutional Ownership
50.6% of TransAlta Corporation shares are held by institutional investors. Comparatively, 43.1% of Azure Power Global shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
TransAlta Corporation pays an annual dividend of $0.13 per share and has a dividend yield of 2.1%. Azure Power Global does not pay a dividend. TransAlta Corporation pays out 144.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
TransAlta Corporation beats Azure Power Global on 8 of the 13 factors compared between the two stocks.
About TransAlta Corporation
TransAlta Corporation (TransAlta) is a non-regulated electricity generation and energy marketing company with an aggregate net ownership interest of approximately 8,720 megawatts of generating capacity. The Company is engaged in the production and sale of electric energy. It focuses on generating and marketing electricity in Canada, the United States and Western Australia through its diversified portfolio of facilities fuelled by coal, natural gas, diesel, hydro, wind and solar. TransAlta is organized into eight business segments: Canadian Coal, U.S. Coal, Canadian Gas, Australian Gas, Wind and Solar, Hydro, Energy Marketing and Corporate. The Canadian Coal, U.S. Coal, Canadian Gas, Australian Gas, Wind and Solar, and Hydro segments are responsible for constructing, operating and maintaining its electrical generation. All the segments are supported by a Corporate segment, which includes the Corporation’s central financial, legal, administrative, and investing functions.
About Azure Power Global
Azure Power Global Limited is an India-based power producer. The Company sells solar power in India on long term fixed price contracts to its customers. The Company is also developing micro-grid applications for the highly fragmented and underserved electricity market in India. The Company operates approximately 20 utility scale projects and several commercial rooftop projects with a combined rated capacity of approximately 240 megawatts. The Company’s services include design, engineering and construction of grid integrated solar installations; off grid solar installations for villages, hamlets and remote areas; turnkey solar installations for commercial and residential complexes on roof tops, as back up and alternate source, and operation and maintenance of solar installations. The Company’s projects include Project Punjab, Rajasthan Projects, Gandhinagar Smart City Rooftop Project and Micro-Grids in Bihar and Uttar Pradesh.
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