Comparing Tenaga Nasional Berhad (OTCMKTS:TNABY) & AES (NYSE:AES)

Tenaga Nasional Berhad (OTCMKTS:TNABY) and AES (NYSE:AES) are both large-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Dividends

Tenaga Nasional Berhad pays an annual dividend of $0.46 per share and has a dividend yield of 3.2%. AES pays an annual dividend of $0.70 per share and has a dividend yield of 4.8%. Tenaga Nasional Berhad pays out 104.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AES pays out 37.4% of its earnings in the form of a dividend. AES has raised its dividend for 12 consecutive years. AES is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

93.1% of AES shares are held by institutional investors. 0.8% of AES shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Tenaga Nasional Berhad and AES’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tenaga Nasional Berhad	N/A	N/A	N/A
AES	10.78%	22.66%	3.84%

Valuation & Earnings

This table compares Tenaga Nasional Berhad and AES”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tenaga Nasional Berhad	N/A	N/A	N/A	$0.44	32.95
AES	$12.23 billion	0.86	$910.00 million	$1.87	7.86

AES has higher revenue and earnings than Tenaga Nasional Berhad. AES is trading at a lower price-to-earnings ratio than Tenaga Nasional Berhad, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Tenaga Nasional Berhad and AES, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tenaga Nasional Berhad	0	0	0	0	0.00
AES	0	8	1	0	2.11

AES has a consensus price target of $15.63, indicating a potential upside of 6.36%. Given AES’s stronger consensus rating and higher possible upside, analysts clearly believe AES is more favorable than Tenaga Nasional Berhad.

Volatility & Risk

Tenaga Nasional Berhad has a beta of -0.37, indicating that its stock price is 137% less volatile than the S&P 500. Comparatively, AES has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Summary

AES beats Tenaga Nasional Berhad on 14 of the 15 factors compared between the two stocks.

About Tenaga Nasional Berhad

Tenaga Nasional Berhad engages in the generation, transmission, distribution, and sale of electricity in Malaysia and internationally. The company operates and maintains thermal generation facilities and hydroelectric power generating schemes; and manages and operates the National Grid that is connected to Thailand's transmission system, as well as Singapore's transmission system at Senoko. It also supplies fuel and coal for power generation; generates, distributes, supplies, deals in, and sells various energy sources, as well as provides related technical services; develops district cooling systems; operates and maintains co-generation works; manufactures, sells, and repairs distribution, power, and earthing transformers; and develops, owns, and manages dry bulk terminals. In addition, the company provides turnkey contracting of transmission substations; repair and maintenance services to heavy industries and other related services; operation and maintenance services on telecommunication equipment and data centres; higher education, and telecommunication and IT infrastructure solution and services; research and development services in the areas of engineering, information technology, business, accountancy, and liberal studies; and training courses. Further, it offers insurance and reinsurance products, technical and laboratory, consultancy, and other services; manufactures and distributes power and general cables, and aluminum rods; operates an integrated district cooling systems for air conditioning systems of office buildings; assembles, manufactures, tests, reconditions, and distributes high and medium voltage switchgears, and control gears for transmission and distribution of electric power; and operates wind assets. It primarily serves commercial, industrial, and residential customers. The company was founded in 1949 and is headquartered in Kuala Lumpur, Malaysia.

About AES

The AES Corporation, together with its subsidiaries, operates as a diversified power generation and utility company in the United States and internationally. The company owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses various fuels and technologies to generate electricity, such as coal, gas, hydro, wind, solar, and biomass, as well as renewables comprising energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.