Head-To-Head Survey: Siemens Energy (OTCMKTS:SMNEY) & TransAlta (NYSE:TAC)

TransAlta (NYSE:TAC) and Siemens Energy (OTCMKTS:SMNEY) are both utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for TransAlta and Siemens Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TransAlta	1	1	6	1	2.78
Siemens Energy	0	3	7	1	2.82

TransAlta currently has a consensus price target of $24.50, suggesting a potential upside of 103.24%. Given TransAlta’s higher probable upside, analysts plainly believe TransAlta is more favorable than Siemens Energy.

Insider and Institutional Ownership

59.0% of TransAlta shares are held by institutional investors. 13.1% of TransAlta shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

TransAlta pays an annual dividend of $0.20 per share and has a dividend yield of 1.7%. Siemens Energy pays an annual dividend of $0.53 per share and has a dividend yield of 0.4%. TransAlta pays out -111.1% of its earnings in the form of a dividend. Siemens Energy pays out 21.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. TransAlta has increased its dividend for 2 consecutive years. TransAlta is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares TransAlta and Siemens Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransAlta	-2.76%	8.85%	0.66%
Siemens Energy	4.75%	18.48%	3.50%

Risk & Volatility

TransAlta has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Siemens Energy has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500.

Earnings & Valuation

This table compares TransAlta and Siemens Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TransAlta	$1.72 billion	2.21	-$98.77 million	($0.18)	-66.97
Siemens Energy	$43.21 billion	2.47	$1.56 billion	$2.44	51.07

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

Summary

Siemens Energy beats TransAlta on 11 of the 17 factors compared between the two stocks.

About TransAlta

TransAlta Corporation engages in the development, production, and sale of electric energy. It operates through Hydro, Wind and Solar, Gas, Energy Transition, and Energy Marketing segments. The Hydro segment holds interest of approximately 922 megawatts (MW) of owned hydroelectric generating capacity located in Alberta, British Columbia, and Ontario. The Wind and Solar segment has a net ownership interest of approximately 2,057 MW of owned wind and solar electrical-generating capacity, as well as battery storage facilities located in Alberta, Ontario, New Brunswick, and Québec in Canada; the states of Massachusetts, Minnesota, New Hampshire, North Carolina, Pennsylvania, Washington, and Wyoming in the United States; and the state of Western Australia. The Gas segment has a net ownership interest of approximately 2,775 MW of owned gas electrical-generating capacity, and facilities located in Alberta, Ontario, Michigan, and the state of Western Australia. The Energy Transition segment has a net ownership interest of approximately 671 MW of owned coal electrical-generating capacity, as well as operates the Skookumchuck hydro facility in Centralia; and engages in the highvale mine and the mine reclamation activities. The Energy Marketing segment is involved in the trading of power, natural gas, and environmental products. It serves customers in various industry segments, including commercial real estate, municipal, manufacturing, industrial, hospitality, finance, and oil and gas. TransAlta Corporation was founded in 1909 and is headquartered in Calgary, Canada.

About Siemens Energy

Siemens Energy AG operates as an energy technology company worldwide. It operates through Gas Services, Grid Technologies, Transformation of Industry, and Siemens Gamesa segments. The company provides gas and steam turbines, generators, and heat pumps, as well as performance enhancement, maintenance, customer training, and professional consulting services for central and distributed power generation; and high voltage direct current transmission systems, offshore windfarm grid connections, transformers, flexible alternating current transmission systems, high voltage substations, air and gas-insulated switchgears, digital grid solutions and components, and storage solutions. It also offers electrolyzers, industrial steam turbines, industrial generators, turbo and reciprocating compressors, compressor trains, and other systems and solutions; onshore and onshore wind turbines; design, engineering, manufacturing, and installation solutions for onshore markets; offshore wind turbine equipment design, manufacturing, and installation solutions; and operation and maintenance services for wind farms. The company serves utilities, independent power producers, project developers, oil and gas, transmission and distribution system operators, and industrial and infrastructure customers. Siemens Energy AG was founded in 1866 and is based in Munich, Germany.