Westar Energy (NYSE: WR) and Atlantica Yield PLC (NASDAQ:ABY) are both mid-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Volatility & Risk

Westar Energy has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Atlantica Yield PLC has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Earnings and Valuation

This table compares Westar Energy and Atlantica Yield PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Westar Energy $2.55 billion 2.85 $1.06 billion $2.38 21.47
Atlantica Yield PLC $1.00 billion 2.10 $697.25 million $0.30 69.70

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

Profitability

This table compares Westar Energy and Atlantica Yield PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westar Energy 13.33% 8.87% 2.97%
Atlantica Yield PLC 3.15% 1.58% 0.30%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Westar Energy and Atlantica Yield PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westar Energy 0 0 3 0 3.00
Atlantica Yield PLC 0 1 2 0 2.67

Westar Energy presently has a consensus target price of $53.00, indicating a potential upside of 3.72%. Atlantica Yield PLC has a consensus target price of $22.33, indicating a potential upside of 6.81%. Given Atlantica Yield PLC’s higher possible upside, analysts clearly believe Atlantica Yield PLC is more favorable than Westar Energy.

Dividends

Westar Energy pays an annual dividend of $1.60 per share and has a dividend yield of 3.1%. Atlantica Yield PLC pays an annual dividend of $1.04 per share and has a dividend yield of 5.0%. Westar Energy pays out 67.2% of its earnings in the form of a dividend. Atlantica Yield PLC pays out 346.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westar Energy has increased its dividend for 11 consecutive years.

Institutional and Insider Ownership

73.7% of Westar Energy shares are held by institutional investors. Comparatively, 47.8% of Atlantica Yield PLC shares are held by institutional investors. 0.6% of Westar Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Westar Energy beats Atlantica Yield PLC on 13 of the 17 factors compared between the two stocks.

About Westar Energy

Westar Energy, Inc. is an electric utility. The Company provides electric generation, transmission and distribution services. The Company provides these services in central and northeastern Kansas, including the cities of Topeka, Lawrence, Manhattan, Salina and Hutchinson. Its subsidiary, Kansas Gas and Electric Company (KGE), provides these services in south-central and southeastern Kansas, including the city of Wichita. Both the Company and KGE conduct business using the name Westar Energy. The Company supplies electric energy at retail to customers in Kansas. The Company also supplies electric energy at wholesale to municipalities and electric cooperatives in Kansas, and has contracts for the sale or purchase of wholesale electricity with other utilities. As of December 31, 2016, it had 6,292 megawatts (MW) of generating capacity in service.

About Atlantica Yield PLC

Atlantica Yield plc, formerly Abengoa Yield plc, is a total return company. The Company owns, manages, and acquires renewable energy, conventional power, electric transmission lines and water assets, focused on North America (the United States and Mexico), South America (Peru, Chile, Brazil and Uruguay) and Europe, Middle East and Africa (Spain, Algeria and South Africa). Its segments include North America, South America and EMEA. It operates in business sectors, including renewable energy, conventional power, electric transmission lines and water. As of December 31, 2016, it owned or had interests in 21 assets, comprising 1,442 megawatt (MW) of renewable energy generation, 300 MW of conventional power generation, 1,099 miles of electric transmission lines, as well as an exchangeable preferred equity investment in Abengoa Concessoes Brasil Holding S.A., (ACBH). The renewable energy sector includes its activities related to the production electricity from solar power and wind plants.

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