Korea Electric Power (NYSE: KEP) and Atlantica Yield (NASDAQ:AY) are both mid-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Institutional and Insider Ownership

4.8% of Korea Electric Power shares are owned by institutional investors. Comparatively, 51.0% of Atlantica Yield shares are owned by institutional investors. 1.0% of Korea Electric Power shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Korea Electric Power and Atlantica Yield, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Korea Electric Power 1 4 2 0 2.14
Atlantica Yield 0 1 3 0 2.75

Atlantica Yield has a consensus target price of $23.75, indicating a potential upside of 11.87%. Given Atlantica Yield’s stronger consensus rating and higher probable upside, analysts clearly believe Atlantica Yield is more favorable than Korea Electric Power.

Risk & Volatility

Korea Electric Power has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Atlantica Yield has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Valuation and Earnings

This table compares Korea Electric Power and Atlantica Yield’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Korea Electric Power $51.76 billion 0.44 $6.34 billion $2.12 8.44
Atlantica Yield $971.80 million 2.19 -$4.85 million $0.27 78.63

Korea Electric Power has higher revenue and earnings than Atlantica Yield. Korea Electric Power is trading at a lower price-to-earnings ratio than Atlantica Yield, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Korea Electric Power and Atlantica Yield’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Korea Electric Power 7.44% 6.06% 2.47%
Atlantica Yield 2.85% 1.41% 0.27%

Dividends

Atlantica Yield pays an annual dividend of $1.16 per share and has a dividend yield of 5.5%. Korea Electric Power does not pay a dividend. Atlantica Yield pays out 429.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Korea Electric Power Company Profile

Korea Electric Power Corporation (KEPCO) is an integrated electric utility company engaged in the transmission and distribution of electricity in the Republic of Korea. Its segments include transmission and distribution, nuclear power generation and thermal power generation and all others . The transmission and distribution segment, which is operated by KEPCO, comprise operations related to the transmission, distribution and sale to end-users of electricity. The nuclear power generation segment, which is engaged in the nuclear, hydro, pumping-up power generation. The thermal power generation segment, which is engaged in bituminous coal, anthracite, liquefied natural gas (LNG) power generation. And the Other Segment comprises operations related to the plant design, power generation equipment assembly, nuclear raw materials supplement, electricity IT service, renewable source power generation and financial investment on overseas businesses.

Atlantica Yield Company Profile

Atlantica Yield plc, formerly Abengoa Yield plc, is a total return company. The Company owns, manages, and acquires renewable energy, conventional power, electric transmission lines and water assets, focused on North America (the United States and Mexico), South America (Peru, Chile, Brazil and Uruguay) and Europe, Middle East and Africa (Spain, Algeria and South Africa). Its segments include North America, South America and EMEA. It operates in business sectors, including renewable energy, conventional power, electric transmission lines and water. As of December 31, 2016, it owned or had interests in 21 assets, comprising 1,442 megawatt (MW) of renewable energy generation, 300 MW of conventional power generation, 1,099 miles of electric transmission lines, as well as an exchangeable preferred equity investment in Abengoa Concessoes Brasil Holding S.A., (ACBH). The renewable energy sector includes its activities related to the production electricity from solar power and wind plants.

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