Contrasting Pattern Energy Group (PEGI) and Huaneng Power International Inc ADR Class N (HNP)

Pattern Energy Group (NASDAQ:PEGI) and Huaneng Power International Inc ADR Class N (NYSE:HNP) are both mid-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Valuation and Earnings

This table compares Pattern Energy Group and Huaneng Power International Inc ADR Class N’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pattern Energy Group $483.00 million 4.41 $142.00 million $1.45 14.98
Huaneng Power International Inc ADR Class N $24.70 billion 0.37 $110.97 million $0.16 151.00

Pattern Energy Group has higher earnings, but lower revenue than Huaneng Power International Inc ADR Class N. Pattern Energy Group is trading at a lower price-to-earnings ratio than Huaneng Power International Inc ADR Class N, indicating that it is currently the more affordable of the two stocks.

Dividends

Pattern Energy Group pays an annual dividend of $1.69 per share and has a dividend yield of 7.8%. Huaneng Power International Inc ADR Class N pays an annual dividend of $0.53 per share and has a dividend yield of 2.2%. Pattern Energy Group pays out 116.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Huaneng Power International Inc ADR Class N pays out 331.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pattern Energy Group has raised its dividend for 4 consecutive years. Pattern Energy Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Pattern Energy Group has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Huaneng Power International Inc ADR Class N has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Pattern Energy Group and Huaneng Power International Inc ADR Class N, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pattern Energy Group 1 4 4 0 2.33
Huaneng Power International Inc ADR Class N 1 2 1 0 2.00

Pattern Energy Group presently has a consensus price target of $22.17, indicating a potential upside of 2.06%. Given Pattern Energy Group’s stronger consensus rating and higher possible upside, analysts clearly believe Pattern Energy Group is more favorable than Huaneng Power International Inc ADR Class N.

Institutional and Insider Ownership

84.2% of Pattern Energy Group shares are owned by institutional investors. Comparatively, 0.3% of Huaneng Power International Inc ADR Class N shares are owned by institutional investors. 1.7% of Pattern Energy Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Pattern Energy Group and Huaneng Power International Inc ADR Class N’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pattern Energy Group -4.52% -1.04% -0.43%
Huaneng Power International Inc ADR Class N 1.67% 2.82% 0.76%

Summary

Pattern Energy Group beats Huaneng Power International Inc ADR Class N on 12 of the 17 factors compared between the two stocks.

Pattern Energy Group Company Profile

Pattern Energy Group Inc. operates as an integrated renewable energy company. The company operates in two segments, Operating Business and Development Business. The Operating Business segment holds interest in 24 renewable energy projects with an operating capacity that totals approximately 4 gigawatts located in the United States, Canada, and Japan. The Development Business segment develops and sells renewable energy projects focusing on wind, solar, storage, and transmission primarily in the United States, Canada, Japan,and Mexico. Pattern Energy Group Inc. sells electricity and renewable energy credits primarily to local utilities and local liquid independent system organizations markets. The company was founded in 2012 and is headquartered in San Francisco, California.

Huaneng Power International Inc ADR Class N Company Profile

Huaneng Power International, Inc., through its subsidiaries, generates and sells electricity and heat to the regional or provincial grid companies in the People's Republic of China and Singapore. It is involved in the development, investment, construction, operation, and management of power plants and related projects; and generation, wholesale, and retail of power and other relating utilities. The company generates power from coal, wind, gas, oil, biomass, solar, and hydro resources. It is also involved in the sale of coal ash and lime; provision of loading warehousing and conveying services; photovoltaic power generation projects development and construction; and provision of thermal energy and cold energy services, as well as thermal heating services. In addition, the company engages in the repair of power equipment; provision of water supply and transportation services; construction and operation of electricity distribution networks and heating pipe networks; power supply, energy transmission, and substation project contracting activities; cargo transportation along domestic coastal areas; port management, investment, and development activities; and port provision, and cargo loading and storage activities. Further, it is involved in the aquaculture and agriculture irrigation activities, as well as provides environment engineering, waste recycling consultancy, and industrial waste management and recycling services. Additionally, it sells raw and processed coal; and provides central heat, and plumbing and pipe installation services, as well as desalinated water. As of March 31, 2018, the company had controlled generating capacity of 104,301 megawatts and a total generating capacity of 91,783 megawatts. Huaneng Power International, Inc. was founded in 1994 and is headquartered in Beijing, the People's Republic of China.

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