Head-To-Head Comparison: Ormat Technologies (NYSE:ORA) and TC Energy (NYSE:TRP)

TC Energy (NYSE:TRP) and Ormat Technologies (NYSE:ORA) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Profitability

This table compares TC Energy and Ormat Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TC Energy	23.04%	10.52%	3.10%
Ormat Technologies	12.52%	5.21%	2.27%

Dividends

TC Energy pays an annual dividend of $2.48 per share and has a dividend yield of 3.9%. Ormat Technologies pays an annual dividend of $0.48 per share and has a dividend yield of 0.4%. TC Energy pays out 106.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ormat Technologies pays out 23.9% of its earnings in the form of a dividend. TC Energy has increased its dividend for 1 consecutive years. TC Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

83.1% of TC Energy shares are held by institutional investors. Comparatively, 95.5% of Ormat Technologies shares are held by institutional investors. 0.6% of Ormat Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for TC Energy and Ormat Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TC Energy	1	6	7	0	2.43
Ormat Technologies	0	4	8	0	2.67

TC Energy currently has a consensus target price of $72.50, suggesting a potential upside of 12.97%. Ormat Technologies has a consensus target price of $129.09, suggesting a potential upside of 16.65%. Given Ormat Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Ormat Technologies is more favorable than TC Energy.

Volatility and Risk

TC Energy has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Ormat Technologies has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Valuation & Earnings

This table compares TC Energy and Ormat Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TC Energy	$10.91 billion	6.13	$2.52 billion	$2.32	27.66
Ormat Technologies	$989.54 million	6.81	$123.90 million	$2.01	55.06

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

Summary

Ormat Technologies beats TC Energy on 9 of the 17 factors compared between the two stocks.

About TC Energy

TC Energy Corporation operates as an energy infrastructure company in North America. It operates through five segments: Canadian Natural Gas Pipelines; U.S. Natural Gas Pipelines; Mexico Natural Gas Pipelines; Liquids Pipelines; and Power and Energy Solutions. The company builds and operates a network of 93,600 kilometers of natural gas pipelines, which transports natural gas from supply basins to local distribution companies, power generation plants, industrial facilities, interconnecting pipelines, LNG export terminals, and other businesses. It also has regulated natural gas storage facilities with a total working gas capacity of 532 billion cubic feet. In addition, it has approximately 4,900 kilometers of liquids pipeline system that connects Alberta crude oil pipeline to refining markets in Illinois, Oklahoma, Texas, and the United States Gulf Coast. Further, the company owns or has interests in power generation facilities with approximately 4,600 megawatts; and owns and operates approximately 118 billion cubic feet of non-regulated natural gas storage facilities in in Alberta, Ontario, Québec, and New Brunswick. The company was formerly known as TransCanada Corporation and changed its name to TC Energy Corporation in May 2019. TC Energy Corporation was founded in 1951 and is headquartered in Calgary, Canada.

About Ormat Technologies

Ormat Technologies, Inc. engages in the geothermal and recovered energy power business in the United States, Indonesia, Kenya, Turkey, Chile, Guatemala, Guadeloupe, New Zealand, Honduras, and internationally. It operates in three segments: Electricity, Product, and Energy Storage. The Electricity segment develops, builds, owns, and operates geothermal, solar photovoltaic, and recovered energy-based power plants; and sells electricity. The Product segment designs, manufactures, and sells equipment for geothermal and recovered energy-based electricity generation; and provides services relating to the engineering, procurement, construction, operation, and maintenance of geothermal and recovered energy-based power plants. This segment serves contractors; and owners and operators of interstate natural gas pipelines, gas processing plants, and cement plants, as well as companies in other energy-intensive industrial processes. The Energy Storage segment offers battery energy storage systems and related services. Ormat Technologies, Inc. was founded in 1965 and is headquartered in Reno, Nevada.