CEMIG (NYSE:CIG) and Huaneng Power International (NYSE:HNP) are both mid-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.
Insider & Institutional Ownership
2.4% of CEMIG shares are held by institutional investors. Comparatively, 0.8% of Huaneng Power International shares are held by institutional investors. 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.
This is a summary of recent ratings for CEMIG and Huaneng Power International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Huaneng Power International||0||2||2||0||2.50|
Volatility & Risk
CEMIG has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, Huaneng Power International has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.
CEMIG pays an annual dividend of $0.13 per share and has a dividend yield of 4.6%. Huaneng Power International pays an annual dividend of $0.53 per share and has a dividend yield of 2.2%. CEMIG pays out 50.0% of its earnings in the form of a dividend. Huaneng Power International pays out 132.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CEMIG is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares CEMIG and Huaneng Power International’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|CEMIG||$6.80 billion||0.53||$313.51 million||$0.26||10.96|
|Huaneng Power International||$22.56 billion||0.40||$233.81 million||$0.40||59.20|
CEMIG has higher earnings, but lower revenue than Huaneng Power International. CEMIG is trading at a lower price-to-earnings ratio than Huaneng Power International, indicating that it is currently the more affordable of the two stocks.
This table compares CEMIG and Huaneng Power International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Huaneng Power International||1.54%||2.51%||0.65%|
CEMIG beats Huaneng Power International on 9 of the 13 factors compared between the two stocks.
CEMIG Company Profile
Companhia Energética de Minas Gerais, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in Brazil. The company generates electricity through renewable energy sources, such as water, wind, sun, and biomass; or non-renewable sources, including fossil and nuclear fuels. As of December 31, 2016, it operated hydroelectric plants, thermoelectric plants, and solar plants with a total installed capacity of approximately 8,000 megawatts in 10 states of Brazil. It is also involved in the telecommunications and energy solutions consulting businesses; exploitation of natural gas; sale and trading of electricity; and acquisition, transport, and distribution of gas and its subproducts and derivatives, as well as provision of technology systems and systems for operational management of public service concessions, including companies operating in electricity, gas, water and sewerage, and other utility companies. The company was founded in 1952 and is headquartered in Belo Horizonte, Brazil.
Huaneng Power International 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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