CPFL Energia (NYSE: CPL) and Ormat Technologies (NYSE:ORA) are both mid-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Volatility & Risk

CPFL Energia has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Ormat Technologies has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Profitability

This table compares CPFL Energia and Ormat Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CPFL Energia 3.50% 7.35% 1.90%
Ormat Technologies 15.36% 10.25% 4.97%

Institutional & Insider Ownership

1.9% of CPFL Energia shares are owned by institutional investors. Comparatively, 46.4% of Ormat Technologies shares are owned by institutional investors. 23.0% of Ormat Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for CPFL Energia and Ormat Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CPFL Energia 0 1 0 0 2.00
Ormat Technologies 0 1 6 0 2.86

Ormat Technologies has a consensus price target of $65.43, suggesting a potential upside of 13.43%. Given Ormat Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Ormat Technologies is more favorable than CPFL Energia.

Earnings and Valuation

This table compares CPFL Energia and Ormat Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CPFL Energia $6.88 billion 1.28 $1.31 billion $0.46 37.72
Ormat Technologies $720.40 million 4.00 $336.78 million $2.19 26.34

CPFL Energia has higher revenue and earnings than Ormat Technologies. Ormat Technologies is trading at a lower price-to-earnings ratio than CPFL Energia, indicating that it is currently the more affordable of the two stocks.

Dividends

CPFL Energia pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. Ormat Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.6%. CPFL Energia pays out 26.1% of its earnings in the form of a dividend. Ormat Technologies pays out 14.6% 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. CPFL Energia has raised its dividend for 3 consecutive years. CPFL Energia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ormat Technologies beats CPFL Energia on 11 of the 17 factors compared between the two stocks.

About CPFL Energia

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.

About Ormat Technologies

Ormat Technologies, Inc. is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal and recovered energy-based power plants. Its equipment manufacturing operations are located in Israel. It conducts its business activities in two business segments: Electricity segment and Product segment. The Electricity segment develops, builds, owns and operates geothermal and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world, and sells the electricity it generates. The Product Segment designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and remote power units, and provide services relating to the engineering, procurement, construction, operation and maintenance of geothermal, and recovered energy-based power plants. It manufactures products that produce electricity from recovered energy or waste heat.

Receive News & Ratings for CPFL Energia S.A. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CPFL Energia S.A. and related companies with MarketBeat.com's FREE daily email newsletter.