Sky Solar (NASDAQ:SKYS) and Pinnacle West Capital (NYSE:PNW) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Risk & Volatility

Sky Solar has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Pinnacle West Capital has a beta of 0.04, meaning that its share price is 96% less volatile than the S&P 500.

Valuation & Earnings

This table compares Sky Solar and Pinnacle West Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sky Solar $56.73 million 4.26 -$33.17 million ($0.80) -0.78
Pinnacle West Capital $3.57 billion 2.79 $488.45 million $4.35 20.43

Pinnacle West Capital has higher revenue and earnings than Sky Solar. Sky Solar is trading at a lower price-to-earnings ratio than Pinnacle West Capital, indicating that it is currently the more affordable of the two stocks.

Dividends

Pinnacle West Capital pays an annual dividend of $2.95 per share and has a dividend yield of 3.3%. Sky Solar does not pay a dividend. Pinnacle West Capital pays out 67.8% of its earnings in the form of a dividend. Pinnacle West Capital has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

0.2% of Sky Solar shares are held by institutional investors. Comparatively, 82.9% of Pinnacle West Capital shares are held by institutional investors. 0.5% of Pinnacle West Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Sky Solar and Pinnacle West Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sky Solar N/A N/A N/A
Pinnacle West Capital 13.71% 9.68% 2.92%

Analyst Ratings

This is a summary of current ratings and price targets for Sky Solar and Pinnacle West Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sky Solar 0 0 0 0 N/A
Pinnacle West Capital 0 7 4 0 2.36

Pinnacle West Capital has a consensus target price of $86.00, indicating a potential downside of 3.23%. Given Pinnacle West Capital’s higher possible upside, analysts plainly believe Pinnacle West Capital is more favorable than Sky Solar.

Summary

Pinnacle West Capital beats Sky Solar on 13 of the 16 factors compared between the two stocks.

Sky Solar Company Profile

Sky Solar Holdings, Ltd., an investment holding company, operates as an independent power producer worldwide. The company develops, owns, and operates solar parks primarily in the downstream solar market. It also sells solar energy systems, including pipeline; and engineering, construction, and procurement services, as well as engages in building and transferring solar parks. As of December 31, 2017, the company developed 318 solar parks with an aggregate capacity of 377.2 megawatts (MW) in Japan, Bulgaria, the Czech Republic, Spain, Canada, the United States, and Uruguay; and owned and operated 196.7 MW of solar parks, including 96.3 MW in Japan, 5.6 MW in the Czech Republic, 0.2 MW in Canada, 0.9 MW in Spain, 22.1 MW in the United States, and 71.6 MW in Uruguay. It also had approximately 400 MW of solar projects in various stages of development in countries, such as Chile, Japan, Canada, and the United States comprising 6.6 MW under construction, 180.1 MW of shovel-ready projects, and approximately 250 MW of solar parks in pipeline. The company has strategic partnership agreement with Hudson Clean Energy Partners for investing in renewable power and clean energy. Sky Solar Holdings, Ltd. was founded in 2009 and is headquartered in Admiralty, Hong Kong.

Pinnacle West Capital Company Profile

Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. It generates, transmits, and distributes electricity using coal, nuclear, gas, oil, and solar resources. The company serves approximately 1.2 million homes and businesses. It owns or leases approximately 6,236 megawatts of regulated generation capacity. The company was founded in 1920 and is headquartered in Phoenix, Arizona.

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