Hawaiian Electric Industries (NYSE: HE) and NRG Energy (NYSE:NRG) are both mid-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.
Institutional and Insider Ownership
49.2% of Hawaiian Electric Industries shares are owned by institutional investors. Comparatively, 97.3% of NRG Energy shares are owned by institutional investors. 0.9% of Hawaiian Electric Industries shares are owned by insiders. Comparatively, 0.3% of NRG Energy shares are owned by 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.
This table compares Hawaiian Electric Industries and NRG Energy’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hawaiian Electric Industries||$2.56 billion||1.42||$167.18 million||$1.63||20.46|
|NRG Energy||$12.35 billion||0.66||-$774.00 million||($5.10)||-5.04|
Hawaiian Electric Industries has higher earnings, but lower revenue than NRG Energy. NRG Energy is trading at a lower price-to-earnings ratio than Hawaiian Electric Industries, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Hawaiian Electric Industries and NRG Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hawaiian Electric Industries||3||1||0||0||1.25|
Hawaiian Electric Industries presently has a consensus target price of $31.67, indicating a potential downside of 5.05%. NRG Energy has a consensus target price of $25.00, indicating a potential downside of 2.69%. Given NRG Energy’s stronger consensus rating and higher possible upside, analysts plainly believe NRG Energy is more favorable than Hawaiian Electric Industries.
This table compares Hawaiian Electric Industries and NRG Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hawaiian Electric Industries||6.54%||8.71%||1.43%|
Hawaiian Electric Industries pays an annual dividend of $1.24 per share and has a dividend yield of 3.7%. NRG Energy pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Hawaiian Electric Industries pays out 76.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NRG Energy pays out -2.4% of its earnings in the form of a dividend.
Risk & Volatility
Hawaiian Electric Industries has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500. Comparatively, NRG Energy has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.
Hawaiian Electric Industries Company Profile
Hawaiian Electric Industries, Inc. is a holding company with its principal subsidiaries engaged in electric utility and banking businesses operating primarily in the State of Hawaii. The Company’s subsidiaries include Hawaiian Electric Company, Inc. (Hawaiian Electric) and ASB Hawaii, Inc. (ASB Hawaii). Its segments include Electric utility, Bank and Other. It operates its electric utility business through Hawaiian Electric and its subsidiaries, Hawaii Electric Light Company, Inc. (Hawaii Electric Light) and Maui Electric Company, Limited (Maui Electric). It operates its Bank segment through ASB Hawaii’s subsidiary, American Savings Bank, F.S.B. (ASB). Its electric public utilities are in the business of generating, purchasing, transmitting, distributing and selling electric energy. ASB is a federally chartered savings bank providing a range of banking services to individual and business customers.
NRG Energy Company Profile
NRG Energy, Inc. (NRG) is an integrated power company. The Company is engaged in producing, selling and delivering electricity and related products and services in various markets in the United States. The Company’s segments include Generation, Retail, Renewables, NRG Yield, Inc. (NRG Yield) and Corporate activities. The Generation segment includes generation, international and Boston Energy Trading and Marketing LLC (BETM). The Retail segment includes Mass customers and Business Solutions. Its Business Solutions include commercial, industrial and governmental/institutional (C&I) customers, and other distributed and reliability products. The Renewables segment includes solar and wind assets. The NRG Yield segment includes certain of the Company’s contracted generation assets. The corporate activities segment includes residential solar and electric vehicle services. The Company owned and operated approximately 47,000 megawatts (MW) of generation, as of December 31, 2016.
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