Comparing NRG Yield, Inc. Class C (NYLD) & WEC Energy Group (WEC)
NRG Yield, Inc. Class C (NYSE: NYLD) and WEC Energy Group (NYSE:WEC) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.
This table compares NRG Yield, Inc. Class C and WEC Energy Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NRG Yield, Inc. Class C||4.10%||1.76%||0.48%|
|WEC Energy Group||15.75%||10.81%||3.24%|
This is a summary of recent ratings and price targets for NRG Yield, Inc. Class C and WEC Energy Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NRG Yield, Inc. Class C||0||5||3||0||2.38|
|WEC Energy Group||1||7||1||0||2.00|
NRG Yield, Inc. Class C presently has a consensus price target of $19.50, indicating a potential upside of 5.69%. WEC Energy Group has a consensus price target of $67.25, indicating a potential upside of 8.45%. Given WEC Energy Group’s higher possible upside, analysts plainly believe WEC Energy Group is more favorable than NRG Yield, Inc. Class C.
NRG Yield, Inc. Class C pays an annual dividend of $1.15 per share and has a dividend yield of 6.2%. WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.4%. NRG Yield, Inc. Class C pays out 230.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WEC Energy Group pays out 54.9% of its earnings in the form of a dividend. NRG Yield, Inc. Class C has increased its dividend for 7 consecutive years. NRG Yield, Inc. Class C is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares NRG Yield, Inc. Class C and WEC Energy Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NRG Yield, Inc. Class C||$1.02 billion||3.34||$67.00 million||$0.50||36.90|
|WEC Energy Group||$7.65 billion||2.56||$940.20 million||$3.79||16.36|
WEC Energy Group has higher revenue and earnings than NRG Yield, Inc. Class C. WEC Energy Group is trading at a lower price-to-earnings ratio than NRG Yield, Inc. Class C, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
29.7% of NRG Yield, Inc. Class C shares are held by institutional investors. Comparatively, 72.6% of WEC Energy Group shares are held by institutional investors. 0.2% of NRG Yield, Inc. Class C shares are held by insiders. Comparatively, 1.0% of WEC Energy Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
WEC Energy Group beats NRG Yield, Inc. Class C on 10 of the 16 factors compared between the two stocks.
About NRG Yield, Inc. Class C
NRG Yield, Inc. serves as the primary vehicle, through which NRG Energy, Inc. owns, operates and acquires contracted renewable and conventional generation and thermal infrastructure assets. It owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States. Its contracted generation portfolio includes three natural gas or dual-fired facilities, eight utility-scale solar and wind generation facilities and two portfolios of distributed solar facilities that collectively represent 1,324 net megawatt. The Company also own thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,098 net megawatt and electric generation capacity of 123 net megawatt. In July 2014, NRG Yield Inc completed its acquisition of three Right of First Offer (ROFO) assets from NRG Energy, Inc. In August 2014, it acquired Alta Wind facility located in Tehachapi, California from Terra-Gen Power LLC.
About WEC Energy Group
WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.
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