Head-To-Head Analysis: TransAlta (TAC) vs. Sky Solar (SKYS)

TransAlta (NYSE: TAC) and Sky Solar (NASDAQ:SKYS) are both small-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, valuation, dividends and earnings.

Analyst Ratings

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This is a breakdown of recent ratings for TransAlta and Sky Solar, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TransAlta 0 0 1 0 3.00
Sky Solar 0 0 2 0 3.00

Sky Solar has a consensus price target of $5.00, indicating a potential upside of 300.00%. Given Sky Solar’s higher probable upside, analysts plainly believe Sky Solar is more favorable than TransAlta.

Earnings and Valuation

This table compares TransAlta and Sky Solar’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TransAlta $1.78 billion 0.87 -$123.42 million ($0.18) -29.72
Sky Solar $65.93 million 7.39 $3.78 million ($0.05) -25.00

Sky Solar has lower revenue, but higher earnings than TransAlta. TransAlta is trading at a lower price-to-earnings ratio than Sky Solar, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TransAlta and Sky Solar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TransAlta -7.95% -1.97% -0.67%
Sky Solar N/A N/A N/A

Volatility & Risk

TransAlta has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Sky Solar has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Dividends

TransAlta pays an annual dividend of $0.12 per share and has a dividend yield of 2.2%. Sky Solar does not pay a dividend. TransAlta pays out -66.7% of its earnings in the form of a dividend.

Institutional & Insider Ownership

53.5% of TransAlta shares are owned by institutional investors. Comparatively, 0.3% of Sky Solar shares are owned by institutional investors. 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.

Summary

Sky Solar beats TransAlta on 10 of the 14 factors compared between the two stocks.

About TransAlta

TransAlta Corporation operates as non-regulated electricity generation and energy marketing company in Canada, the United States, and Western Australia. The company operates through eight segments: Canadian Coal, U.S. Coal, Canadian Gas, Australian Gas, Wind and Solar, Hydro, Energy Marketing, and Corporate. It generates and markets electricity through various generation facilities. The company has an aggregate net ownership interest of approximately 8,546 megawatts of generating capacity. TransAlta Corporation was founded in 1909 and is headquartered in Calgary, Canada.

About Sky Solar

Sky Solar Holdings, Ltd. is an investment holding company. The Company is an independent power producer (IPP) engaged in developing, owning and operating solar parks. The Company focuses on the downstream solar market and develops projects primarily in Asia, South America, Europe and North America. Its subsidiaries are engaged in activities, such as selling electricity generated from solar parks owned by the Company as IPP; pipeline (including obtaining permits required for solar power projects and sourcing of solar modules), and providing engineering, procurement and construction (EPC) services ; providing operating and maintenance (O&M) services for solar parks; sales of solar modules, and building and transferring of solar parks (BT). The Company has developed over 270 solar parks with an aggregate capacity of approximately 252.8 megawatts (MW). It has over 1.3 gigawatts (GW) of solar projects in various stages of development in countries, such as Chile, Uruguay, Japan and Canada.

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