Critical Analysis: Unitil (NYSE:UTL) versus Tenaga Nasional Berhad (OTCMKTS:TNABY)

Unitil (NYSE:UTL) and Tenaga Nasional Berhad (OTCMKTS:TNABY) are both utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

76.8% of Unitil shares are owned by institutional investors. 2.2% of Unitil shares are owned by company insiders. 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.

Risk and Volatility

Unitil has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, Tenaga Nasional Berhad has a beta of -0.37, suggesting that its share price is 137% less volatile than the S&P 500.

Valuation & Earnings

This table compares Unitil and Tenaga Nasional Berhad”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Unitil	$536.00 million	1.80	$50.20 million	$3.16	17.01
Tenaga Nasional Berhad	N/A	N/A	N/A	$0.44	32.02

Unitil has higher revenue and earnings than Tenaga Nasional Berhad. Unitil is trading at a lower price-to-earnings ratio than Tenaga Nasional Berhad, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Unitil and Tenaga Nasional Berhad’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Unitil	9.60%	9.89%	2.89%
Tenaga Nasional Berhad	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent recommendations for Unitil and Tenaga Nasional Berhad, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Unitil	0	5	0	0	2.00
Tenaga Nasional Berhad	0	1	0	0	2.00

Unitil presently has a consensus price target of $56.50, suggesting a potential upside of 5.12%. Given Unitil’s higher probable upside, equities research analysts clearly believe Unitil is more favorable than Tenaga Nasional Berhad.

Dividends

Unitil pays an annual dividend of $1.90 per share and has a dividend yield of 3.5%. Tenaga Nasional Berhad pays an annual dividend of $0.46 per share and has a dividend yield of 3.3%. Unitil pays out 60.1% of its earnings in the form of a dividend. Tenaga Nasional Berhad pays out 104.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Unitil has increased its dividend for 12 consecutive years. Unitil is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Unitil beats Tenaga Nasional Berhad on 12 of the 13 factors compared between the two stocks.

About Unitil

Unitil Corporation, a public utility holding company, engages in the distribution of electricity and natural gas. It operates through two segments, Utility Electric Operations, Utility Gas Operations. The company distributes electricity in the southeastern seacoast and state capital regions of New Hampshire, and the greater Fitchburg area of north central Massachusetts; and distributes natural gas in southeastern New Hampshire and portions of southern and central Maine, including the city of Portland and the Lewiston-Auburn area, as well as electricity and natural gas in the greater Fitchburg area of north central Massachusetts. It also operates 86 miles of interstate underground natural gas transmission pipeline that provides interstate natural gas pipeline access and transportation services primarily in Maine and New Hampshire. In addition, the company provides real estate management services. It serves approximately 108,100 electric customers and 87,500 natural gas customers. Unitil Corporation was incorporated in 1984 and is headquartered in Hampton, New Hampshire.

About Tenaga Nasional Berhad

Tenaga Nasional Berhad engages in the generation, transmission, distribution, and sale of electricity in Malaysia and internationally. The company operates and maintains thermal generation facilities and hydroelectric power generating schemes; and manages and operates the National Grid that is connected to Thailand's transmission system, as well as Singapore's transmission system at Senoko. It also supplies fuel and coal for power generation; generates, distributes, supplies, deals in, and sells various energy sources, as well as provides related technical services; develops district cooling systems; operates and maintains co-generation works; manufactures, sells, and repairs distribution, power, and earthing transformers; and develops, owns, and manages dry bulk terminals. In addition, the company provides turnkey contracting of transmission substations; repair and maintenance services to heavy industries and other related services; operation and maintenance services on telecommunication equipment and data centres; higher education, and telecommunication and IT infrastructure solution and services; research and development services in the areas of engineering, information technology, business, accountancy, and liberal studies; and training courses. Further, it offers insurance and reinsurance products, technical and laboratory, consultancy, and other services; manufactures and distributes power and general cables, and aluminum rods; operates an integrated district cooling systems for air conditioning systems of office buildings; assembles, manufactures, tests, reconditions, and distributes high and medium voltage switchgears, and control gears for transmission and distribution of electric power; and operates wind assets. It primarily serves commercial, industrial, and residential customers. The company was founded in 1949 and is headquartered in Kuala Lumpur, Malaysia.