Head-To-Head Contrast: Ormat Technologies (ORA) vs. PPL (PPL)

Ormat Technologies (NYSE:ORA) and PPL (NYSE:PPL) are both oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Profitability

This table compares Ormat Technologies and PPL’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ormat Technologies 18.88% 9.60% 4.73%
PPL 18.08% 15.30% 4.01%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ormat Technologies and PPL, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ormat Technologies 0 3 3 0 2.50
PPL 1 6 5 0 2.33

Ormat Technologies presently has a consensus target price of $67.20, indicating a potential upside of 21.72%. PPL has a consensus target price of $34.20, indicating a potential upside of 17.16%. Given Ormat Technologies’ stronger consensus rating and higher possible upside, research analysts clearly believe Ormat Technologies is more favorable than PPL.

Valuation & Earnings

This table compares Ormat Technologies and PPL’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ormat Technologies $692.81 million 4.03 $132.41 million $2.99 18.46
PPL $7.45 billion 2.74 $1.13 billion $2.25 12.97

PPL has higher revenue and earnings than Ormat Technologies. PPL is trading at a lower price-to-earnings ratio than Ormat Technologies, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

72.9% of Ormat Technologies shares are owned by institutional investors. Comparatively, 80.1% of PPL shares are owned by institutional investors. 0.5% of Ormat Technologies shares are owned by insiders. Comparatively, 0.4% of PPL 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.

Dividends

Ormat Technologies pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. PPL pays an annual dividend of $1.64 per share and has a dividend yield of 5.6%. Ormat Technologies pays out 13.4% of its earnings in the form of a dividend. PPL pays out 72.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. PPL has increased its dividend for 6 consecutive years. PPL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Ormat Technologies has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, PPL has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500.

Summary

Ormat Technologies beats PPL on 10 of the 17 factors compared between the two stocks.

Ormat Technologies Company Profile

Ormat Technologies, Inc. engages in the geothermal and recovered energy power business worldwide. The company operates through Electricity and Product segments. The Electricity segment develops, builds, owns, and operates geothermal and recovered energy-based power plants; and sells electricity. This segment also offers energy storage, demand response, and energy management related services. The Product segment designs, manufactures, and sells equipment for geothermal and recovered energy-based electricity generation, such as fossil fuel powered turbo-generators and heavy duty direct-current generators. This segment also provides services relating to the engineering, procurement, construction, operation, and maintenance of geothermal and recovered energy-based power plants. The Product segment serves contractors; developers, owners, and operators of geothermal power plants; and owners and operators of interstate natural gas pipelines, gas processing plants, and cement plants, as well as companies in other energy-intensive industrial processes. Ormat Technologies, Inc. was founded in 1965 and is based in Reno, Nevada.

PPL Company Profile

PPL Corporation, a utility holding company, delivers electricity and natural gas in the United States and the United Kingdom. The company operates in three segments: U.K. Regulated, Kentucky Regulated, and Pennsylvania Regulated. It serves 411,000 electric and 326,000 natural gas customers in Louisville and adjacent areas in Kentucky; 525,000 customers in central, southeastern, and western Kentucky; and approximately 28,000 customers in 5 counties in southwestern Virginia, and 3 customers in Tennessee. The company also provides electric delivery services to approximately 1.4 million customers in Pennsylvania; and operates electricity distribution networks in the United Kingdom, as well as delivers natural gas to customers in Kentucky; generates electricity from power plants in Kentucky; and sells wholesale electricity to 10 municipalities in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.

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