Head to Head Comparison: Iberdrola (OTCMKTS:IBDRY) versus Xcel Energy (NASDAQ:XEL)

Iberdrola (OTCMKTS:IBDRY) and Xcel Energy (NASDAQ:XEL) are both large-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Dividends

Iberdrola pays an annual dividend of $2.99 per share and has a dividend yield of 3.1%. Xcel Energy pays an annual dividend of $2.37 per share and has a dividend yield of 3.1%. Iberdrola pays out 63.3% of its earnings in the form of a dividend. Xcel Energy pays out 64.9% 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. Xcel Energy has increased its dividend for 22 consecutive years. Iberdrola is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

0.0% of Iberdrola shares are owned by institutional investors. Comparatively, 78.4% of Xcel Energy shares are owned by institutional investors. 0.2% of Xcel Energy 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.

Profitability

This table compares Iberdrola and Xcel Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iberdrola	15.59%	9.88%	3.83%
Xcel Energy	15.28%	10.65%	2.97%

Risk and Volatility

Iberdrola has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Xcel Energy has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Iberdrola and Xcel Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iberdrola	1	6	2	0	2.11
Xcel Energy	1	0	14	2	3.00

Xcel Energy has a consensus target price of $92.76, suggesting a potential upside of 20.14%. Given Xcel Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Xcel Energy is more favorable than Iberdrola.

Valuation & Earnings

This table compares Iberdrola and Xcel Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iberdrola	$51.52 billion	3.12	$7.11 billion	$4.72	20.14
Xcel Energy	$14.67 billion	3.29	$2.02 billion	$3.65	21.15

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

Summary

Xcel Energy beats Iberdrola on 10 of the 18 factors compared between the two stocks.

About Iberdrola

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain, the United Kingdom, the United States, Mexico, Brazil, Germany, France, and Australia. It generates electricity from renewable sources, such as onshore and offshore wind, hydro, photovoltaic, combined cycle gas, and conventional nuclear, as well as through batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; energy retail supply activities, such as gas and electricity, and other products and services, including hydrogen, as well as non-renewable generation; and production of green hydrogen. It has a total installed capacity of 62,871 MW. In addition, the company offers heat pumps, self-consumption, electric mobility, solar, etc. services to residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is based in Bilbao, Spain.

About Xcel Energy

Xcel Energy Inc., through its subsidiaries, engages in the generation, purchasing, transmission, distribution, and sale of electricity. It operates through Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments. The company generates electricity through wind, nuclear, hydroelectric, biomass, and solar energy sources, as well as coal, natural gas, oil, wood, and refuse-derived fuels. It also purchases, transports, distributes, and sells natural gas to retail customers, as well as transports customer-owned natural gas. In addition, the company develops and leases natural gas pipelines, and storage and compression facilities; and invests in rental housing projects and nonregulated assets, as well as procures equipment for the construction of renewable generation facilities. It serves residential, commercial, and industrial customers in the portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. The company was incorporated in 1909 and is headquartered in Minneapolis, Minnesota.