Xcel Energy (NASDAQ:XEL – Get Free Report) and Algonquin Power & Utilities (NYSE:AQN – Get Free Report) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.
Volatility & Risk
Xcel Energy has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Algonquin Power & Utilities has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.
Dividends
Xcel Energy pays an annual dividend of $2.37 per share and has a dividend yield of 2.9%. Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.4%. Xcel Energy pays out 68.3% of its earnings in the form of a dividend. Algonquin Power & Utilities pays out 118.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Xcel Energy has increased its dividend for 22 consecutive years.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Xcel Energy | $14.78 billion | 3.42 | $2.02 billion | $3.47 | 23.37 |
| Algonquin Power & Utilities | $2.43 billion | 1.89 | $180.80 million | $0.22 | 27.16 |
Xcel Energy has higher revenue and earnings than Algonquin Power & Utilities. Xcel Energy is trading at a lower price-to-earnings ratio than Algonquin Power & Utilities, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent recommendations and price targets for Xcel Energy and Algonquin Power & Utilities, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Xcel Energy | 1 | 0 | 13 | 3 | 3.06 |
| Algonquin Power & Utilities | 0 | 7 | 6 | 0 | 2.46 |
Xcel Energy presently has a consensus price target of $90.63, indicating a potential upside of 11.77%. Algonquin Power & Utilities has a consensus price target of $6.77, indicating a potential upside of 13.35%. Given Algonquin Power & Utilities’ higher possible upside, analysts plainly believe Algonquin Power & Utilities is more favorable than Xcel Energy.
Profitability
This table compares Xcel Energy and Algonquin Power & Utilities’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Xcel Energy | 14.14% | 10.37% | 2.90% |
| Algonquin Power & Utilities | 6.62% | 5.21% | 1.83% |
Institutional & Insider Ownership
78.4% of Xcel Energy shares are held by institutional investors. Comparatively, 62.3% of Algonquin Power & Utilities shares are held by institutional investors. 0.2% of Xcel Energy shares are held by company insiders. Comparatively, 0.1% of Algonquin Power & Utilities shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Xcel Energy beats Algonquin Power & Utilities on 14 of the 18 factors compared between the two stocks.
About Xcel Energy
Xcel Energy Inc., through its subsidiaries, engages in the generation, purchasing, transmission, distribution, and sale of electricity. It operates through Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments. The company generates electricity through wind, nuclear, hydroelectric, biomass, and solar energy sources, as well as coal, natural gas, oil, wood, and refuse-derived fuels. It also purchases, transports, distributes, and sells natural gas to retail customers, as well as transports customer-owned natural gas. In addition, the company develops and leases natural gas pipelines, and storage and compression facilities; and invests in rental housing projects and nonregulated assets, as well as procures equipment for the construction of renewable generation facilities. It serves residential, commercial, and industrial customers in the portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. The company was incorporated in 1909 and is headquartered in Minneapolis, Minnesota.
About Algonquin Power & Utilities
Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.
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