Critical Analysis: AGL Energy (AGLNF) versus Its Competitors

AGL Energy (OTCMKTS:AGLNF) is one of 141 publicly-traded companies in the “Independent Power & Renewable Electricity Producers” industry, but how does it contrast to its rivals? We will compare AGL Energy to related companies based on the strength of its valuation, profitability, risk, analyst recommendations, institutional ownership, earnings and dividends.

Dividends

AGL Energy pays an annual dividend of $0.60 per share and has a dividend yield of 10.2%. AGL Energy pays out 59.2% of its earnings in the form of a dividend. As a group, “Independent Power & Renewable Electricity Producers” companies pay a dividend yield of 6.6% and pay out 275.8% of their earnings in the form of a dividend. AGL Energy is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares AGL Energy and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
AGL Energy	N/A	N/A	5.83
AGL Energy Competitors	$6.35 billion	$832.74 million	19.94

AGL Energy’s rivals have higher revenue and earnings than AGL Energy. AGL Energy is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares AGL Energy and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGL Energy	N/A	N/A	N/A
AGL Energy Competitors	-38.57%	13.35%	0.71%

Insider and Institutional Ownership

15.3% of AGL Energy shares are owned by institutional investors. Comparatively, 35.2% of shares of all “Independent Power & Renewable Electricity Producers” companies are owned by institutional investors. 21.7% of shares of all “Independent Power & Renewable Electricity Producers” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for AGL Energy and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGL Energy	0	0	1	0	3.00
AGL Energy Competitors	928	2930	3713	177	2.41

As a group, “Independent Power & Renewable Electricity Producers” companies have a potential upside of 146.42%. Given AGL Energy’s rivals higher probable upside, analysts plainly believe AGL Energy has less favorable growth aspects than its rivals.

Summary

AGL Energy rivals beat AGL Energy on 8 of the 13 factors compared.

About AGL Energy

AGL Energy Limited supplies energy and other essential services to residential, small and large businesses, and wholesale customers in Australia. It operates through three segments: Customer Markets, Integrated Energy, and Investments. The company engages in retailing of electricity, gas, broadband, mobile, voice, solar, and energy products and services; and operates power generation portfolio and other assets including coal, gas and renewable generation, natural gas storage and production, and development projects. It also offers renewable energy schemes; and controls dispatch of owned and contracted generation assets, gas offtake agreements, and associated portfolio of energy hedging products. In addition, the company offers coal and gas-fired generation; and renewable energy sources, such as wind, hydro and solar, batteries and other firming technology; and gas production and storage assets. AGL Energy Limited was founded in 1837 and is based in Sydney, Australia.