Atlantica Yield PLC (ABY) and WEC Energy Group (WEC) Financial Review

Atlantica Yield PLC (NASDAQ: ABY) and WEC Energy Group (NYSE:WEC) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Profitability

This table compares Atlantica Yield PLC and WEC Energy Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield PLC 3.15% 1.58% 0.30%
WEC Energy Group 12.72% 10.75% 3.23%

Risk & Volatility

Atlantica Yield PLC has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Atlantica Yield PLC and WEC Energy Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield PLC 0 1 2 0 2.67
WEC Energy Group 1 5 1 0 2.00

Atlantica Yield PLC presently has a consensus target price of $22.33, indicating a potential upside of 13.19%. WEC Energy Group has a consensus target price of $62.50, indicating a potential downside of 3.85%. Given Atlantica Yield PLC’s stronger consensus rating and higher probable upside, equities analysts plainly believe Atlantica Yield PLC is more favorable than WEC Energy Group.

Dividends

Atlantica Yield PLC pays an annual dividend of $1.04 per share and has a dividend yield of 5.3%. WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.2%. Atlantica Yield PLC pays out 346.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WEC Energy Group pays out 68.4% of its earnings in the form of a dividend. Atlantica Yield PLC has raised its dividend for 6 consecutive years. Atlantica Yield PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

47.8% of Atlantica Yield PLC shares are owned by institutional investors. Comparatively, 70.2% of WEC Energy Group shares are owned by institutional investors. 1.0% of WEC Energy Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Atlantica Yield PLC and WEC Energy Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atlantica Yield PLC $1.00 billion 1.98 $697.25 million $0.30 65.77
WEC Energy Group $7.61 billion 2.70 $2.51 billion $3.04 21.38

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

Summary

WEC Energy Group beats Atlantica Yield PLC on 10 of the 17 factors compared between the two stocks.

Atlantica Yield PLC 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.

WEC Energy Group Company Profile

WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.

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