The AES Corporation (NYSE: AES) and Duke Energy Corporation (NYSE:DUK) are both mid-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Institutional and Insider Ownership

93.2% of The AES Corporation shares are owned by institutional investors. Comparatively, 56.2% of Duke Energy Corporation shares are owned by institutional investors. 1.1% of The AES Corporation shares are owned by company insiders. Comparatively, 0.1% of Duke Energy Corporation shares are owned 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.

Risk & Volatility

The AES Corporation has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Duke Energy Corporation has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Profitability

This table compares The AES Corporation and Duke Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The AES Corporation -5.30% 15.86% 2.57%
Duke Energy Corporation 9.89% 7.72% 2.38%

Earnings and Valuation

This table compares The AES Corporation and Duke Energy Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The AES Corporation $14.05 billion 0.52 $3.58 billion ($1.14) -9.80
Duke Energy Corporation $23.07 billion 2.65 $10.44 billion $3.37 25.96

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

Analyst Ratings

This is a summary of recent recommendations and price targets for The AES Corporation and Duke Energy Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The AES Corporation 1 4 0 0 1.80
Duke Energy Corporation 3 9 2 0 1.93

The AES Corporation currently has a consensus price target of $12.00, indicating a potential upside of 7.43%. Duke Energy Corporation has a consensus price target of $82.08, indicating a potential downside of 6.20%. Given The AES Corporation’s higher possible upside, analysts plainly believe The AES Corporation is more favorable than Duke Energy Corporation.

Dividends

The AES Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 4.3%. Duke Energy Corporation pays an annual dividend of $3.56 per share and has a dividend yield of 4.1%. The AES Corporation pays out -42.1% of its earnings in the form of a dividend. Duke Energy Corporation pays out 105.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The AES Corporation has raised its dividend for 10 consecutive years and Duke Energy Corporation has raised its dividend for 4 consecutive years. The AES Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

The AES Corporation beats Duke Energy Corporation on 9 of the 16 factors compared between the two stocks.

About The AES Corporation

The AES Corporation is a holding company. The Company, through its subsidiaries and affiliates, operates a diversified portfolio of electricity generation and distribution businesses. It is organized into six strategic business units (SBUs): the United States; Andes; Brazil; Mexico, Central America and the Caribbean (MCAC); Europe, and Asia. As of December 31, 2016, its United States SBU had 18 generation facilities and two integrated utilities in the United States. As of December 31, 2016, its Andes SBU had generation facilities in three countries. Its Brazil SBU has generation and distribution businesses, Eletropaulo and Tiete. As of December 31, 2016, its MCAC SBU had a portfolio of distribution businesses and generation facilities, including renewable energy, in five countries. As of December 31, 2016, its Europe SBU had generation facilities in five countries. As of December 31, 2016, its Asia SBU had generation facilities in three countries.

About Duke Energy Corporation

Duke Energy Corporation (Duke Energy) is an energy company. The Company operates through three segments: Electric Utilities and Infrastructure; Gas Utilities and Infrastructure, and Commercial Renewables. The Company operates in the United States through its direct and indirect subsidiaries. The Electric Utilities and Infrastructure segment provides retail electric service through the generation, transmission, distribution and sale of electricity to approximately 7.5 million customers within the Southeast and Midwest regions of the United States. The operations include electricity sold wholesale to municipalities, electric cooperative utilities and other load-serving entities. The Gas Utilities and Infrastructure segment serves residential, commercial, industrial and power generation natural gas customers. The Commercial Renewables primarily acquires, builds, develops and operates wind and solar renewable generation throughout the continental United States.

Receive News & Ratings for The AES Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for The AES Corporation and related companies with Analyst Ratings Network's FREE daily email newsletter.