Vistra Energy (NYSE: HNP) and Huaneng Power International (NYSE:HNP) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

0.8% of Huaneng Power International shares are held by institutional investors. 15.7% of Vistra Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Vistra Energy has a beta of -0.17, indicating that its share price is 117% less volatile than the S&P 500. Comparatively, Huaneng Power International has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Profitability

This table compares Vistra Energy and Huaneng Power International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vistra Energy -8.24% 6.72% 2.63%
Huaneng Power International 1.54% 2.51% 0.65%

Valuation and Earnings

This table compares Vistra Energy and Huaneng Power International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vistra Energy $5.43 billion 2.23 -$254.00 million $0.96 24.32
Huaneng Power International $22.56 billion 0.43 $233.81 million $0.40 64.08

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

Dividends

Huaneng Power International pays an annual dividend of $0.53 per share and has a dividend yield of 2.1%. Vistra Energy does not pay a dividend. Huaneng Power International pays out 132.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent ratings and target prices for Vistra Energy and Huaneng Power International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vistra Energy 0 2 9 0 2.82
Huaneng Power International 0 2 2 0 2.50

Vistra Energy currently has a consensus price target of $24.39, indicating a potential upside of 4.45%. Given Vistra Energy’s stronger consensus rating and higher possible upside, equities analysts plainly believe Vistra Energy is more favorable than Huaneng Power International.

Summary

Vistra Energy beats Huaneng Power International on 9 of the 16 factors compared between the two stocks.

Vistra Energy Company Profile

Vistra Energy Corp., through its subsidiaries, engages in the integrated power business in Texas. The company operates through Wholesale Generation and Retail Electricity segments. The Wholesale Generation segment engages in the electricity generation, wholesale energy sales and purchases, commodity risk management, fuel production, and fuel logistics management activities. As of February 26, 2018, this segment had a fleet of generation facilities totaling approximately 14,000 megawatts of generation in Texas, including 2,300 megawatts fueled by nuclear power, 4,000 megawatts fueled by coal, and 7,500 megawatts fueled by natural gas. The Retail Electricity segment is involved in the retail sale of electricity and related services to residential, commercial, and industrial customers under the TXU Energy brand. This segment served approximately 1.7 million residential and business customers. The company was formerly known as TCEH Corp. and changed its name to Vistra Energy Corp. in November 2016. The company is based in Irving, Texas.

Huaneng Power International Company Profile

Huaneng Power International, Inc., through its subsidiaries, generates and sells electricity and heat to the regional or provincial grid companies in the People's Republic of China and Singapore. It is involved in the development, investment, construction, operation, and management of power plants and related projects; and generation, wholesale, and retail of power and other relating utilities. The company generates power from coal, wind, gas, oil, biomass, solar, and hydro resources. It is also involved in the sale of coal ash and lime; provision of loading warehousing and conveying services; photovoltaic power generation projects development and construction; and provision of thermal energy and cold energy services, as well as thermal heating services. In addition, the company engages in the repair of power equipment; provision of water supply and transportation services; construction and operation of electricity distribution networks and heating pipe networks; power supply, energy transmission, and substation project contracting activities; cargo transportation along domestic coastal areas; port management, investment, and development activities; and port provision, and cargo loading and storage activities. Further, it is involved in the aquaculture and agriculture irrigation activities, as well as provides environment engineering, waste recycling consultancy, and industrial waste management and recycling services. Additionally, it sells raw and processed coal; and provides central heat, and plumbing and pipe installation services, as well as desalinated water. As of March 31, 2018, the company had controlled generating capacity of 104,301 megawatts and a total generating capacity of 91,783 megawatts. Huaneng Power International, Inc. was founded in 1994 and is headquartered in Beijing, the People's Republic of China.

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