Analyzing Pinnacle West Capital (PNW) and Avangrid (AGR)

Pinnacle West Capital (NYSE:PNW) and Avangrid (NYSE:AGR) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.

Insider and Institutional Ownership

82.0% of Pinnacle West Capital shares are held by institutional investors. Comparatively, 13.7% of Avangrid shares are held by institutional investors. 0.5% of Pinnacle West Capital shares are held by company insiders. Comparatively, 0.4% of Avangrid shares are held by company 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.

Volatility & Risk

Pinnacle West Capital has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, Avangrid has a beta of 0.04, suggesting that its share price is 96% less volatile than the S&P 500.

Dividends

Pinnacle West Capital pays an annual dividend of $2.78 per share and has a dividend yield of 3.6%. Avangrid pays an annual dividend of $1.76 per share and has a dividend yield of 3.7%. Pinnacle West Capital pays out 63.9% of its earnings in the form of a dividend. Avangrid pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pinnacle West Capital has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Pinnacle West Capital and Avangrid, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pinnacle West Capital 0 6 3 0 2.33
Avangrid 2 2 6 0 2.40

Pinnacle West Capital currently has a consensus target price of $84.00, suggesting a potential upside of 7.44%. Avangrid has a consensus target price of $53.86, suggesting a potential upside of 13.26%. Given Avangrid’s stronger consensus rating and higher probable upside, analysts clearly believe Avangrid is more favorable than Pinnacle West Capital.

Valuation and Earnings

This table compares Pinnacle West Capital and Avangrid’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pinnacle West Capital $3.57 billion 2.46 $488.45 million $4.35 17.97
Avangrid $5.96 billion 2.46 $381.00 million $2.20 21.61

Pinnacle West Capital has higher earnings, but lower revenue than Avangrid. Pinnacle West Capital is trading at a lower price-to-earnings ratio than Avangrid, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pinnacle West Capital and Avangrid’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pinnacle West Capital 12.95% 9.12% 2.75%
Avangrid 6.07% 4.47% 2.16%

Summary

Pinnacle West Capital beats Avangrid on 10 of the 17 factors compared between the two stocks.

Pinnacle West Capital Company Profile

Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. It generates, transmits, and distributes electricity using coal, nuclear, gas, oil, and solar resources. The company serves approximately 1.2 million homes and businesses. It owns or leases approximately 6,236 megawatts of regulated generation capacity. The company was founded in 1920 and is headquartered in Phoenix, Arizona.

Avangrid Company Profile

Avangrid, Inc. operates as an energy services holding company in the United States. It engages in the generation, transmission, and distribution of electricity, as well as distribution, transportation, and sale of natural gas. As of December 31, 2017, the company delivered electricity to approximately 2.2 million electric utility customers, as well as natural gas to approximately 1 million natural gas public utility customers; and owned approximately 67.5 billion cubic feet of net working gas storage capacity. It also develops, constructs, and operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. The company delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities. It also generates and provides power and other services to federal and state agencies, as well as institutional retail and joint action agencies; and delivers thermal output to wholesale customers in the Western United States. The company was formerly known as Iberdrola USA, Inc. Avangrid, Inc. was founded in 1852 and is headquartered in Orange, Connecticut. Avangrid, Inc. is a subsidiary of Iberdrola, S.A.

Receive News & Ratings for Pinnacle West Capital Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Pinnacle West Capital and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply