Critical Comparison: Enel Generacion Chile (NYSE:EOCC) & CPFL Energia (NYSE:CPL)

Enel Generacion Chile (NYSE:EOCC) and CPFL Energia (NYSE:CPL) are both mid-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Dividends

Enel Generacion Chile pays an annual dividend of $1.93 per share. CPFL Energia pays an annual dividend of $0.22 per share and has a dividend yield of 1.4%. Enel Generacion Chile has raised its dividend for 2 consecutive years and CPFL Energia has raised its dividend for 5 consecutive years. CPFL Energia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings for Enel Generacion Chile and CPFL Energia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enel Generacion Chile 0 0 0 0 N/A
CPFL Energia 1 0 1 0 2.00

Insider and Institutional Ownership

0.4% of Enel Generacion Chile shares are owned by institutional investors. Comparatively, 0.4% of CPFL Energia shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Enel Generacion Chile has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, CPFL Energia has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Profitability

This table compares Enel Generacion Chile and CPFL Energia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enel Generacion Chile 21.20% 24.58% 13.82%
CPFL Energia 8.47% 17.47% 5.43%

Valuation & Earnings

This table compares Enel Generacion Chile and CPFL Energia’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enel Generacion Chile $2.45 billion 0.00 N/A N/A N/A
CPFL Energia $7.65 billion 1.07 $563.08 million N/A N/A

CPFL Energia has higher revenue and earnings than Enel Generacion Chile.

Enel Generacion Chile Company Profile

Enel Generación Chile S.A., an electricity utility company, engages in the generation, transmission, and distribution of electricity in Chile. The company generates electricity through hydro, thermal, and wind power sources. As of December 31, 2017, it had 6,351 megawatts of installed capacity with 28 generation facilities and a total of 111 generation units. The company supplies its electricity to regulated electricity distribution companies; unregulated industrial firms primarily in the mining, pulp, and steel sectors; and the pool market. It is also involved in exploitation and transportation of natural gas; and provision of engineering consulting services. The company was formerly known as Empresa Nacional de Electricidad S.A. and changed its name to Enel Generación Chile S.A. in November 2016. The company was founded in 1943 and is headquartered in Santiago, Chile. Enel Generación Chile S.A. is a subsidiary of Enel Chile S.A.

CPFL Energia Company Profile

CPFL Energia S.A., through its subsidiaries, generates, transmits, distributes, and commercializes electricity to residential, industrial, and commercial customers in Brazil. The company generates electricity through wind, biomass, solar, and hydroelectric power plants. It also manufactures, commercializes, rents, and maintains electro-mechanical equipment; and offers administrative, call center, collection, IT, telecommunication, energy transmission, and energy efficiency management services, as well as maintenance services for energy generation companies. As of December 31, 2018, the company distributed electricity to approximately 9.6 million customers; and had 323,979 kilometers of distribution lines, which included 464,627 distribution transformers. It also has an installed capacity of 3,272 megawatts. The company was founded in 1998 and is headquartered in Campinas, Brazil. CPFL Energia S.A. is a subsidiary of State Grid Brazil Power Participações S.A.

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