Financial Analysis: Iberdrola (OTCMKTS:IBDRY) versus Vistra (NYSE:VST)

Vistra (NYSE:VST) and Iberdrola (OTCMKTS:IBDRY) are both large-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Volatility & Risk

Vistra has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Iberdrola has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Valuation and Earnings

This table compares Vistra and Iberdrola”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vistra	$17.22 billion	3.75	$2.66 billion	$2.77	68.83
Iberdrola	$48.42 billion	2.82	$6.07 billion	$3.61	22.65

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

Insider & Institutional Ownership

90.9% of Vistra shares are owned by institutional investors. Comparatively, 0.0% of Iberdrola shares are owned by institutional investors. 1.4% of Vistra shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Vistra and Iberdrola, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vistra	0	2	12	4	3.11
Iberdrola	1	2	2	0	2.20

Vistra presently has a consensus target price of $234.21, indicating a potential upside of 22.85%. Given Vistra’s stronger consensus rating and higher possible upside, analysts plainly believe Vistra is more favorable than Iberdrola.

Dividends

Vistra pays an annual dividend of $0.90 per share and has a dividend yield of 0.5%. Iberdrola pays an annual dividend of $2.98 per share and has a dividend yield of 3.6%. Vistra pays out 32.5% of its earnings in the form of a dividend. Iberdrola pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vistra has increased its dividend for 6 consecutive years.

Profitability

This table compares Vistra and Iberdrola’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vistra	6.70%	64.88%	4.45%
Iberdrola	12.10%	9.22%	3.49%

Summary

Vistra beats Iberdrola on 13 of the 18 factors compared between the two stocks.

About Vistra

Vistra Corp., together with its subsidiaries, operates as an integrated retail electricity and power generation company. The company operates through six segments: Retail, Texas, East, West, Sunset, and Asset Closure. It retails electricity and natural gas to residential, commercial, and industrial customers across states in the United States and the District of Columbia. In addition, the company is involved in the electricity generation, wholesale energy purchases and sales, commodity risk management, fuel production, and fuel logistics management activities. It serves approximately 4 million customers with a generation capacity of approximately 37,000 megawatts with a portfolio of natural gas, nuclear, coal, solar, and battery energy storage facilities. The company was formerly known as Vistra Energy Corp. and changed its name to Vistra Corp. in July 2020. Vistra Corp. was founded in 1882 and is based in Irving, Texas.

About Iberdrola

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain, the United Kingdom, the United States, Mexico, Brazil, Germany, France, and Australia. It generates electricity from renewable sources, such as onshore and offshore wind, hydro, photovoltaic, combined cycle gas, and conventional nuclear, as well as through batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; energy retail supply activities, such as gas and electricity, and other products and services, including hydrogen, as well as non-renewable generation; and production of green hydrogen. It has a total installed capacity of 62,871 MW. In addition, the company offers heat pumps, self-consumption, electric mobility, solar, etc. services to residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is based in Bilbao, Spain.