CEMIG (NYSE:CIG) and Algonquin Power & Utilities (NYSE:AQN) are both mid-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.
Institutional & Insider Ownership
45.9% of Algonquin Power & Utilities shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility & Risk
CEMIG has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Algonquin Power & Utilities has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500.
Dividends
CEMIG pays an annual dividend of $0.01 per share and has a dividend yield of 0.5%. Algonquin Power & Utilities pays an annual dividend of $0.62 per share and has a dividend yield of 3.8%. Algonquin Power & Utilities pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Algonquin Power & Utilities has increased its dividend for 7 consecutive years. Algonquin Power & Utilities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for CEMIG and Algonquin Power & Utilities, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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CEMIG | 0 | 1 | 1 | 0 | 2.50 |
Algonquin Power & Utilities | 1 | 3 | 4 | 0 | 2.38 |
CEMIG currently has a consensus target price of $17.00, indicating a potential upside of 698.12%. Algonquin Power & Utilities has a consensus target price of $16.5625, indicating a potential upside of 2.36%. Given CEMIG's stronger consensus rating and higher probable upside, equities research analysts plainly believe CEMIG is more favorable than Algonquin Power & Utilities.
Valuation & Earnings
This table compares CEMIG and Algonquin Power & Utilities' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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CEMIG | $6.32 billion | 0.51 | $792.38 million | N/A | N/A |
Algonquin Power & Utilities | $1.62 billion | 5.96 | $530.88 million | $0.63 | 25.68 |
CEMIG has higher revenue and earnings than Algonquin Power & Utilities.
Profitability
This table compares CEMIG and Algonquin Power & Utilities' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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CEMIG | 7.60% | 5.68% | 1.83% |
Algonquin Power & Utilities | 27.73% | 7.87% | 3.10% |
Summary
Algonquin Power & Utilities beats CEMIG on 8 of the 14 factors compared between the two stocks.