Critical Contrast: Ameren (NYSE:AEE) & Comp En De Mn Cemig ADS (NYSE:CIG)

Ameren (NYSE:AEE) and Comp En De Mn Cemig ADS (NYSE:CIG) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Risk and Volatility

Ameren has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Comp En De Mn Cemig ADS has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Institutional and Insider Ownership

79.1% of Ameren shares are owned by institutional investors. 0.3% of Ameren shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Ameren and Comp En De Mn Cemig ADS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameren	0	3	10	0	2.77
Comp En De Mn Cemig ADS	0	1	0	0	2.00

Ameren presently has a consensus target price of $121.42, indicating a potential upside of 15.65%. Given Ameren’s stronger consensus rating and higher possible upside, equities analysts clearly believe Ameren is more favorable than Comp En De Mn Cemig ADS.

Profitability

This table compares Ameren and Comp En De Mn Cemig ADS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ameren	17.86%	10.95%	3.00%
Comp En De Mn Cemig ADS	10.44%	17.20%	7.48%

Dividends

Ameren pays an annual dividend of $3.00 per share and has a dividend yield of 2.9%. Comp En De Mn Cemig ADS pays an annual dividend of $0.22 per share and has a dividend yield of 10.0%. Ameren pays out 52.8% of its earnings in the form of a dividend. Comp En De Mn Cemig ADS pays out 115.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameren has increased its dividend for 12 consecutive years.

Valuation & Earnings

This table compares Ameren and Comp En De Mn Cemig ADS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameren	$8.80 billion	3.30	$1.46 billion	$5.68	18.48
Comp En De Mn Cemig ADS	$7.66 billion	0.82	$877.05 million	$0.19	11.55

Ameren has higher revenue and earnings than Comp En De Mn Cemig ADS. Comp En De Mn Cemig ADS is trading at a lower price-to-earnings ratio than Ameren, indicating that it is currently the more affordable of the two stocks.

Summary

Ameren beats Comp En De Mn Cemig ADS on 13 of the 17 factors compared between the two stocks.

About Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.

About Comp En De Mn Cemig ADS

Companhia Energética de Minas Gerais, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in Brazil. The company generates electricity through renewable energy sources, such as water, wind, sun, and biomass; or non-renewable sources, including fossil and nuclear fuels. As of December 31, 2016, it operated hydroelectric plants, thermoelectric plants, and solar plants with a total installed capacity of approximately 8,000 megawatts in 10 states of Brazil. It is also involved in the telecommunications and energy solutions consulting businesses; exploitation of natural gas; sale and trading of electricity; and acquisition, transport, and distribution of gas and its subproducts and derivatives, as well as provision of technology systems and systems for operational management of public service concessions, including companies operating in electricity, gas, water and sewerage, and other utility companies. The company was founded in 1952 and is headquartered in Belo Horizonte, Brazil.