Critical Analysis: Sky Solar (SKYS) & Avangrid (AGR)
Sky Solar (NASDAQ:SKYS) and Avangrid (NYSE:AGR) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.
Earnings and Valuation
This table compares Sky Solar and Avangrid’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sky Solar||$56.73 million||N/A||-$33.17 million||($0.80)||-1.35|
|Avangrid||$5.96 billion||2.62||$381.00 million||$2.20||23.01|
Institutional & Insider Ownership
14.2% of Avangrid shares are owned by institutional investors. 0.4% of Avangrid shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Sky Solar and Avangrid’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Sky Solar has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, Avangrid has a beta of 0.09, meaning that its stock price is 91% less volatile than the S&P 500.
This is a summary of current recommendations for Sky Solar and Avangrid, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Avangrid has a consensus target price of $53.00, suggesting a potential upside of 4.68%. Given Avangrid’s higher possible upside, analysts plainly believe Avangrid is more favorable than Sky Solar.
Avangrid pays an annual dividend of $1.76 per share and has a dividend yield of 3.5%. Sky Solar does not pay a dividend. Avangrid pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avangrid has increased its dividend for 2 consecutive years.
Avangrid beats Sky Solar on 13 of the 15 factors compared between the two stocks.
Sky Solar Company Profile
Sky Solar Holdings, Ltd., an investment holding company, operates as an independent power producer worldwide. The company develops, owns, and operates solar parks primarily in the downstream solar market. It also sells solar energy systems, including pipeline; and engineering, construction, and procurement services, as well as engages in building and transferring solar parks. As of December 31, 2017, the company developed 318 solar parks with an aggregate capacity of 377.2 megawatts (MW) in Japan, Bulgaria, the Czech Republic, Spain, Canada, the United States, and Uruguay; and owned and operated 196.7 MW of solar parks, including 96.3 MW in Japan, 5.6 MW in the Czech Republic, 0.2 MW in Canada, 0.9 MW in Spain, 22.1 MW in the United States, and 71.6 MW in Uruguay. It also had approximately 400 MW of solar projects in various stages of development in countries, such as Chile, Japan, Canada, and the United States comprising 6.6 MW under construction, 180.1 MW of shovel-ready projects, and approximately 250 MW of solar parks in pipeline. The company has strategic partnership agreement with Hudson Clean Energy Partners for investing in renewable power and clean energy. Sky Solar Holdings, Ltd. was founded in 2009 and is headquartered in Admiralty, Hong Kong.
Avangrid Company Profile
Avangrid, Inc. operates as an energy services holding company in the United States. It engages in the generation, transmission, and distribution of electricity, as well as distribution, transportation, and sale of natural gas. The company also develops, constructs, and operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. It delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities. In addition, the company generates and provides power and other services to federal and state agencies, as well as institutional retail and joint action agencies; and delivers thermal output to wholesale customers in the Western United States. As of November 2, 2018, it owned eight electric and natural gas utilities, serving 3.2 million customers in New York and New England, as well as owned and operated 7.1 gigawatts of electricity capacity, primarily through wind power in 22 states across the United States. The company was formerly known as Iberdrola USA, Inc. The company was founded in 1852 and is headquartered in Orange, Connecticut. Avangrid, Inc. is a subsidiary of Iberdrola, S.A.
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