Critical Review: AES (NYSE:AES) & Fervo Energy (NASDAQ:FRVO)

AES (NYSE:AES) and Fervo Energy (NASDAQ:FRVO) are both utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

93.1% of AES shares are owned by institutional investors. 0.8% of AES shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for AES and Fervo Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AES	0	7	0	0	2.00
Fervo Energy	1	1	14	2	2.94

AES currently has a consensus price target of $15.83, suggesting a potential upside of 5.66%. Fervo Energy has a consensus price target of $39.53, suggesting a potential upside of 391.71%. Given Fervo Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Fervo Energy is more favorable than AES.

Valuation & Earnings

This table compares AES and Fervo Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AES	$12.23 billion	0.87	$910.00 million	$2.62	5.72
Fervo Energy	$140,000.00	16,927.65	-$70.51 million	($4.10)	-1.96

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

Profitability

This table compares AES and Fervo Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AES	14.30%	20.69%	3.62%
Fervo Energy	N/A	N/A	N/A

Summary

AES beats Fervo Energy on 9 of the 14 factors compared between the two stocks.

About AES

The AES Corporation, together with its subsidiaries, operates as a diversified power generation and utility company in the United States and internationally. The company owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses various fuels and technologies to generate electricity, such as coal, gas, hydro, wind, solar, and biomass, as well as renewables comprising energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.

About Fervo Energy

Fervo Energy Company is a geothermal energy developer, builds, owns and operates geothermal power facilities. Fervo Energy Company is based in Houston, Texas.