Critical Survey: Alliant Energy (NASDAQ:LNT) and Avista (NYSE:AVA)


Share on StockTwits

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

Profitability

This table compares Alliant Energy and Avista’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alliant Energy 19.33% 12.01% 3.86%
Avista 9.31% 6.19% 1.96%

Dividends

Alliant Energy pays an annual dividend of $1.61 per share and has a dividend yield of 2.8%. Avista pays an annual dividend of $1.69 per share and has a dividend yield of 3.6%. Alliant Energy pays out 69.7% of its earnings in the form of a dividend. Avista pays out 97.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alliant Energy has increased its dividend for 1 consecutive years and Avista has increased its dividend for 1 consecutive years.

Risk and Volatility

Alliant Energy has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Avista has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Alliant Energy and Avista, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alliant Energy 0 4 2 0 2.33
Avista 1 1 0 0 1.50

Alliant Energy presently has a consensus price target of $56.17, suggesting a potential downside of 2.18%. Avista has a consensus price target of $42.50, suggesting a potential downside of 9.63%. Given Alliant Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Alliant Energy is more favorable than Avista.

Institutional and Insider Ownership

73.0% of Alliant Energy shares are held by institutional investors. Comparatively, 81.9% of Avista shares are held by institutional investors. 0.3% of Alliant Energy shares are held by company insiders. Comparatively, 1.0% of Avista shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Alliant Energy and Avista’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alliant Energy $3.65 billion 3.94 $567.40 million $2.31 24.86
Avista $1.35 billion 2.42 $196.98 million $1.74 27.03

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

Summary

Alliant Energy beats Avista on 11 of the 16 factors compared between the two stocks.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the Midwest region of the United States. It operates in three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its other subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. As of December 31, 2020, IPL supplied electric and natural gas service to approximately 495,000 and 225,000 retail customers respectively; and WPL supplied electric and natural gas service to approximately 480,000 and 195,000 retail customers, respectively. It serves retail customers in the farming, agriculture, industrial manufacturing, chemical, and packaging and food industries. In addition, the company owns and operates a short-line rail freight service in Iowa; a barge, rail, and truck freight terminal on the Mississippi River; and a rail-served warehouse in Cedar Rapids, Iowa, as well as offers freight brokerage and logistics management services. Further, it holds interests in a 347 megawatt (MW) natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a 225 MW wind farm located in Oklahoma. The company was incorporated in 1981 and is headquartered in Madison, Wisconsin.

About Avista

Avista Corporation operates as an electric and natural gas utility company. It operates in two segments, Avista Utilities and AEL&P. The Avista Utilities segment provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho; and natural gas distribution services in parts of northeastern and southwestern Oregon, as well as generates electricity in Washington, Idaho, Oregon, and Montana. This segment also engages in the wholesale purchase and sale of electricity and natural gas. The AEL&P segment offers electric services to 17,000 customers in the city and borough of Juneau, Alaska. The company generates electricity through hydro, thermal, and wind facilities. As of February 24, 2021, it provided electric service to 400,000 customers and natural gas to 367,000 customers. In addition, the company engages in the venture fund investments, real estate investments, and other investments. Avista Corporation was incorporated in 1889 and is headquartered in Spokane, Washington.

Receive News & Ratings for Alliant Energy Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Alliant Energy and related companies with MarketBeat.com's FREE daily email newsletter.