Talen Energy (NASDAQ:TLN – Get Free Report) and Clearway Energy (NYSE:CWEN – Get Free Report) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.
Institutional & Insider Ownership
0.4% of Talen Energy shares are held by institutional investors. Comparatively, 84.5% of Clearway Energy shares are held by institutional investors. 0.8% of Talen Energy shares are held by company insiders. Comparatively, 0.5% of Clearway Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Talen Energy and Clearway Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Talen Energy | -5.38% | 43.32% | 5.31% |
| Clearway Energy | 5.78% | 1.60% | 0.55% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Talen Energy and Clearway Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Talen Energy | 2 | 2 | 12 | 0 | 2.62 |
| Clearway Energy | 0 | 1 | 7 | 2 | 3.10 |
Talen Energy presently has a consensus price target of $458.69, suggesting a potential upside of 33.68%. Clearway Energy has a consensus price target of $42.00, suggesting a potential upside of 31.19%. Given Talen Energy’s higher possible upside, equities research analysts clearly believe Talen Energy is more favorable than Clearway Energy.
Valuation and Earnings
This table compares Talen Energy and Clearway Energy”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Talen Energy | $3.74 billion | 4.39 | -$219.00 million | ($4.17) | -82.28 |
| Clearway Energy | $1.43 billion | 4.60 | $169.00 million | $0.76 | 42.12 |
Clearway Energy has lower revenue, but higher earnings than Talen Energy. Talen Energy is trading at a lower price-to-earnings ratio than Clearway Energy, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Talen Energy has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500. Comparatively, Clearway Energy has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.
Summary
Clearway Energy beats Talen Energy on 8 of the 15 factors compared between the two stocks.
About Talen Energy
Talen Energy Corporation is a U.S.-based energy and power generation company. The Company owns or controls approximately 16,000 megawatts of capacity in wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. The Company generates and sells electricity, capacity and related products from power plants that use fuel sources, such as nuclear, natural gas and coal. The Company’s Susquehanna nuclear power plant has approximately two boiling water reactors with a combined capacity of over 2,600 megawatts. Its fossil fuel plants are located in Athens, Barney Davis, Bayonne, Brandon Shores, Brunner Island, Camden, Colstrip and Dartmouth, among others. It has an art energy trading center located in Allentown, Pennsylvania (PA), where it manages asset load obligations, fuel supply, capacity and related products, and all supporting physical or financial transactions for its electric generation portfolio.
About Clearway Energy
Clearway Energy, Inc. operates in the renewable energy business in the United States. The company operates through Conventional and Renewables segments. It has approximately 6,000 net MW of installed wind, solar, and energy generation projects; and approximately 2,500 net MW of natural gas-fired generation facilities. The company was formerly known as NRG Yield, Inc. and changed its name to Clearway Energy, Inc. in August 2018. Clearway Energy, Inc. was incorporated in 2012 and is based in Princeton, New Jersey. Clearway Energy, Inc. is a subsidiary of Clearway Energy Group LLC.
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