Critical Review: Caribbean Utilities (OTCMKTS:CUPUF) & Hydro One (OTCMKTS:HRNNF)

Caribbean Utilities (OTCMKTS:CUPUF) and Hydro One (OTCMKTS:HRNNF) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Profitability

This table compares Caribbean Utilities and Hydro One’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caribbean Utilities	N/A	N/A	N/A
Hydro One	14.74%	10.52%	3.47%

Valuation & Earnings

This table compares Caribbean Utilities and Hydro One”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caribbean Utilities	N/A	N/A	N/A	$0.70	19.38
Hydro One	$6.19 billion	3.80	$843.65 million	$0.75	52.25

Hydro One has higher revenue and earnings than Caribbean Utilities. Caribbean Utilities is trading at a lower price-to-earnings ratio than Hydro One, indicating that it is currently the more affordable of the two stocks.

Dividends

Caribbean Utilities pays an annual dividend of $0.66 per share and has a dividend yield of 4.9%. Hydro One pays an annual dividend of $0.95 per share and has a dividend yield of 2.4%. Caribbean Utilities pays out 94.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hydro One pays out 126.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Caribbean Utilities is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings for Caribbean Utilities and Hydro One, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caribbean Utilities	0	0	0	0	0.00
Hydro One	0	5	1	0	2.17

Institutional and Insider Ownership

0.1% of Caribbean Utilities shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Hydro One beats Caribbean Utilities on 8 of the 11 factors compared between the two stocks.

About Caribbean Utilities

Caribbean Utilities Company, Ltd. engages in the generation, transmission, and distribution of electricity in Grand Cayman. The company generates electricity using diesel with 166 megawatts total installed capacity. It also operates nine transformer substations with approximately 436 miles of land-based high voltage transmission and distribution lines and 15 miles of high-voltage submarine cables. The company also provides telecommunication services. The company was incorporated in 1966 and is headquartered in Grand Cayman, the Cayman Islands. Caribbean Utilities Company, Ltd. is a subsidiary of Fortis Energy (Bermuda) Ltd.

About Hydro One

Hydro One Limited, through its subsidiaries, operates as an electricity transmission and distribution company in Ontario. The company operates through three segments: Transmission, Distribution, and Other. It owns and operates approximately 30,000 circuit kilometers of high-voltage transmission lines and approximately 125,000 circuit kilometers primary low-voltage distribution lines. The company serves residential, small business, commercial, and industrial customers, as well as municipal utilities. It also provides telecommunications support services for its transmission and distribution businesses; and information and communications technology services and solutions. The company was incorporated in 2015 and is headquartered in Toronto, Canada.