Head-To-Head Analysis: Algonquin Power & Utilities (AQN) and DTE Energy (DTE)

Algonquin Power & Utilities (NYSE:AQN) and DTE Energy (NYSE:DTE) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Algonquin Power & Utilities and DTE Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Algonquin Power & Utilities 0 2 1 0 2.33
DTE Energy 1 5 4 0 2.30

Algonquin Power & Utilities presently has a consensus price target of $11.25, indicating a potential upside of 14.56%. DTE Energy has a consensus price target of $112.50, indicating a potential upside of 2.14%. Given Algonquin Power & Utilities’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Algonquin Power & Utilities is more favorable than DTE Energy.

Dividends

Algonquin Power & Utilities pays an annual dividend of $0.51 per share and has a dividend yield of 5.2%. DTE Energy pays an annual dividend of $3.53 per share and has a dividend yield of 3.2%. Algonquin Power & Utilities pays out 87.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DTE Energy pays out 63.1% of its earnings in the form of a dividend. DTE Energy has increased its dividend for 6 consecutive years.

Insider & Institutional Ownership

41.0% of Algonquin Power & Utilities shares are owned by institutional investors. Comparatively, 70.9% of DTE Energy shares are owned by institutional investors. 0.6% of DTE Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Algonquin Power & Utilities and DTE Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Algonquin Power & Utilities $1.56 billion 2.98 $148.95 million $0.58 16.93
DTE Energy $12.61 billion 1.59 $1.13 billion $5.59 19.70

DTE Energy has higher revenue and earnings than Algonquin Power & Utilities. Algonquin Power & Utilities is trading at a lower price-to-earnings ratio than DTE Energy, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Algonquin Power & Utilities has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, DTE Energy has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500.

Profitability

This table compares Algonquin Power & Utilities and DTE Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Algonquin Power & Utilities 10.92% 10.25% 3.64%
DTE Energy 8.58% 10.63% 3.19%

Summary

DTE Energy beats Algonquin Power & Utilities on 10 of the 17 factors compared between the two stocks.

Algonquin Power & Utilities Company Profile

Algonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets in Canada and the United States. The company generates and sells electrical energy through a portfolio of non-regulated renewable and clean energy power generation facilities. It owns or has interests in hydroelectric facilities with a generating capacity of approximately 120 megawatts (MW); wind powered generating facilities with a generating capacity of 1,050 MW; solar energy facilities with a generating capacity of 40 MW; and thermal energy facilities with a generating capacity of 335 MW. The company also owns and operates a portfolio of regulated electric, natural gas, water distribution, and wastewater collection utility systems. It serves approximately 265,000 electric connections; 337,000 natural gas connections; and 160,000 regulated water distribution and wastewater collection utility systems in the states of California, New Hampshire, Missouri, Kansas, Oklahoma, Arkansas, Georgia, Illinois, Iowa, Massachusetts, Arizona, and Texas. The company was incorporated in 1988 and is headquartered in Oakville, Canada.

DTE Energy Company Profile

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to approximately 2.2 million residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through fossil-fuel, hydroelectric pumped storage, and nuclear plants, as well as wind and other renewable assets. This segment owns and operates approximately 692 distribution substations and 440,500 line transformers. Its Gas segment purchases, stores, transports, distributes, and sells natural gas to approximately 1.3 million residential, commercial, and industrial customers in Michigan, as well as the sells storage and transportation capacity. This segment has approximately 19,500 miles of distribution mains; 1,216,000 service pipelines; and 1,262,000 active meters, as well as owns approximately 2,000 miles of transmission pipelines. The company's Gas Storage and Pipelines segment owns natural gas storage fields, lateral and gathering pipeline systems, and compression and surface facilities, as well as has ownership interests in interstate pipelines serving the Midwest, Ontario, and northeast markets. Its Power and Industrial Projects segment provides metallurgical coke; pulverized coal and petroleum coke to the steel, pulp and paper, and other industries; and power, steam and chilled water production, and wastewater treatment services, as well as supplies compressed air to industrial customers. It also owns and operates 5 renewable generating plants with a capacity of 217 MWs; 21 landfill gas recovery sites; and 11 reduced emissions fuel facilities. The company's Energy Trading segment is involved in power and gas marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. DTE Energy Company was founded in 1903 and is headquartered in Detroit, Michigan.

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