Algonquin Power & Utilities (NYSE:AQN) and Electricité de France (OTCMKTS:ECIFF) Critical Analysis

Electricité de France (OTCMKTS:ECIFF) and Algonquin Power & Utilities (NYSE:AQN) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Electricité de France and Algonquin Power & Utilities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Electricité de France	N/A	N/A	N/A
Algonquin Power & Utilities	5.77%	5.16%	1.79%

Valuation & Earnings

This table compares Electricité de France and Algonquin Power & Utilities”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Electricité de France	N/A	N/A	N/A	$1.90	6.77
Algonquin Power & Utilities	$2.43 billion	1.78	$180.80 million	$0.19	29.61

Algonquin Power & Utilities has higher revenue and earnings than Electricité de France. Electricité de France is trading at a lower price-to-earnings ratio than Algonquin Power & Utilities, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Electricité de France and Algonquin Power & Utilities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Electricité de France	0	0	0	0	0.00
Algonquin Power & Utilities	0	6	6	0	2.50

Algonquin Power & Utilities has a consensus target price of $6.72, suggesting a potential upside of 19.56%. Given Algonquin Power & Utilities’ stronger consensus rating and higher possible upside, analysts clearly believe Algonquin Power & Utilities is more favorable than Electricité de France.

Dividends

Electricité de France pays an annual dividend of $0.68 per share and has a dividend yield of 5.3%. Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.6%. Electricité de France pays out 35.8% of its earnings in the form of a dividend. Algonquin Power & Utilities pays out 136.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Electricité de France is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

3.7% of Electricité de France shares are held by institutional investors. Comparatively, 62.3% of Algonquin Power & Utilities shares are held by institutional investors. 0.1% of Algonquin Power & Utilities shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Algonquin Power & Utilities beats Electricité de France on 10 of the 13 factors compared between the two stocks.

About Electricité de France

Electricité de France S.A., an integrated energy company, engages in the power generation, transmission, distribution, supply, and trading activities in France, the United Kingdom, Italy, and internationally. The company generates electricity through nuclear, fossil fuel, hydro, solar, wind, biomass, biogas, thermal, and cogeneration plants. It also manages low and medium-voltage public electricity distribution networks; operates, maintains, and develops high-voltage and very-high-voltage electricity transmission networks; and services and produces equipment and fuel for nuclear reactors. In addition, the company is involved in commodity trading activities; and the provision of energy services, including district heating services, thermal energy services, etc. It serves approximately 38.5 million customers, including small businesses, local authorities, and industrial and residential customers. The company was founded in 1946 and is headquartered in Paris, France.

About Algonquin Power & Utilities

Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.