Reviewing RED ELECTRICA C/ADR (RDEIY) and TransAlta (TAC)

RED ELECTRICA C/ADR (OTCMKTS:RDEIY) and TransAlta (NYSE:TAC) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, institutional ownership, valuation and profitability.

Earnings and Valuation

This table compares RED ELECTRICA C/ADR and TransAlta’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RED ELECTRICA C/ADR $2.19 billion 5.02 N/A N/A N/A
TransAlta $1.78 billion 0.87 -$123.42 million ($0.18) -30.11

RED ELECTRICA C/ADR has higher revenue and earnings than TransAlta.

Risk & Volatility

RED ELECTRICA C/ADR has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, TransAlta has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for RED ELECTRICA C/ADR and TransAlta, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RED ELECTRICA C/ADR 1 0 1 0 2.00
TransAlta 0 2 1 0 2.33

Institutional and Insider Ownership

0.3% of RED ELECTRICA C/ADR shares are held by institutional investors. Comparatively, 55.4% of TransAlta shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares RED ELECTRICA C/ADR and TransAlta’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RED ELECTRICA C/ADR N/A N/A N/A
TransAlta -8.42% -1.67% -0.58%

Dividends

RED ELECTRICA C/ADR pays an annual dividend of $0.55 per share and has a dividend yield of 5.4%. TransAlta pays an annual dividend of $0.12 per share and has a dividend yield of 2.2%. TransAlta pays out -66.7% of its earnings in the form of a dividend.

Summary

RED ELECTRICA C/ADR beats TransAlta on 6 of the 10 factors compared between the two stocks.

About RED ELECTRICA C/ADR

Red Eléctrica Corporación, S.A. transmits electricity; operates and manages transmission network for the electricity system; and manages electricity transmission grid in Spain and internationally. Its transmission network comprises approximately 43,800 kilometers; and has 86,654 MVA of transformer capacity. The company also provides consultancy, engineering, and construction services; telecommunications infrastructure services to telecommunications operators comprising leasing of dark fiber; and line and sub-station maintenance services. Red Eléctrica Corporación, S.A. was founded in 1985 and is based in Alcobendas, Spain.

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.

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