Xcel Energy (NYSE: XEL) and Atlantic Power (NYSE:AT) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.

Profitability

This table compares Xcel Energy and Atlantic Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcel Energy 10.40% 10.63% 2.85%
Atlantic Power -14.09% 34.66% 1.25%

Dividends

Xcel Energy pays an annual dividend of $1.44 per share and has a dividend yield of 2.9%. Atlantic Power does not pay a dividend. Xcel Energy pays out 61.8% of its earnings in the form of a dividend. Xcel Energy has increased its dividend for 13 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Xcel Energy and Atlantic Power, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcel Energy 0 8 3 0 2.27
Atlantic Power 0 2 0 0 2.00

Xcel Energy currently has a consensus target price of $49.45, indicating a potential downside of 1.86%. Atlantic Power has a consensus target price of $2.48, indicating a potential upside of 3.13%. Given Atlantic Power’s higher probable upside, analysts clearly believe Atlantic Power is more favorable than Xcel Energy.

Insider & Institutional Ownership

73.4% of Xcel Energy shares are owned by institutional investors. Comparatively, 47.8% of Atlantic Power shares are owned by institutional investors. 0.2% of Xcel Energy shares are owned by insiders. Comparatively, 1.6% of Atlantic Power shares are owned by 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.

Valuation & Earnings

This table compares Xcel Energy and Atlantic Power’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Xcel Energy $11.11 billion 2.30 $1.12 billion $2.33 21.63
Atlantic Power $399.20 million 0.69 -$113.90 million ($0.55) -4.36

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

Risk & Volatility

Xcel Energy has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500. Comparatively, Atlantic Power has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500.

Summary

Xcel Energy beats Atlantic Power on 11 of the 17 factors compared between the two stocks.

Xcel Energy Company Profile

Xcel Energy Inc. is a public utility holding company. The Company’s operations include the activity of four utility subsidiaries that serve electric and natural gas customers in eight states. The Company’s segments include regulated electric utility, regulated natural gas utility and all other. The Company’s utility subsidiaries include NSP-Minnesota, NSP-Wisconsin, Public Service Company of Colorado (PSCo) and Southwestern Public Service Co. (SPS), which serve customers in portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Along with WYCO Development LLC (WYCO), a joint venture formed with Colorado Interstate Gas Company, LLC (CIG) to develop and lease natural gas pipelines storage and compression facilities, and WestGas InterState, Inc. (WGI), an interstate natural gas pipeline company, these companies comprise the regulated utility operations.

Atlantic Power Company Profile

Atlantic Power Corporation (Atlantic Power) owns and operates a fleet of power generation assets in the United States and Canada. The Company’s power generation projects sell electricity to utilities and other commercial customers. Atlantic Power’s segments include East U.S., West U.S. and Canada. The Company’s East U.S. segment comprises natural gas, biomass, coal and hydro projects. The Company’s projects under the West U.S. segment include Naval Station, Naval Training Center, North Island, Oxnard, Manchief and Frederickson, which are focused on natural gas, and Koma Kulshan, which is focused on hydro. Under the Canada segment, the Company’s projects located in British Columbia include Mamquam, Mamquam and Williams Lake. Its Calstock and Tunis projects are located in Ontario. The Company’s portfolio consisted of interests in 19 operational power generation projects across nine states in the United States and two provinces in Canada, as of December 31, 2016.

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