Brookfield Renewable Partners (NYSE:BEP – Get Free Report) and Xcel Energy (NASDAQ:XEL – Get Free Report) are both large-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.
Profitability
This table compares Brookfield Renewable Partners and Xcel Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Brookfield Renewable Partners | 8.28% | 1.57% | 0.53% |
| Xcel Energy | 14.14% | 10.37% | 2.90% |
Earnings & Valuation
This table compares Brookfield Renewable Partners and Xcel Energy”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Brookfield Renewable Partners | $6.41 billion | 1.55 | $3.00 million | ($0.31) | -106.40 |
| Xcel Energy | $14.67 billion | 3.36 | $2.02 billion | $3.47 | 22.77 |
Xcel Energy has higher revenue and earnings than Brookfield Renewable Partners. Brookfield Renewable Partners is trading at a lower price-to-earnings ratio than Xcel Energy, indicating that it is currently the more affordable of the two stocks.
Dividends
Brookfield Renewable Partners pays an annual dividend of $1.57 per share and has a dividend yield of 4.8%. Xcel Energy pays an annual dividend of $2.37 per share and has a dividend yield of 3.0%. Brookfield Renewable Partners pays out -506.5% of its earnings in the form of a dividend. Xcel Energy pays out 68.3% 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. Brookfield Renewable Partners has increased its dividend for 2 consecutive years and Xcel Energy has increased its dividend for 22 consecutive years. Brookfield Renewable Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Brookfield Renewable Partners and Xcel Energy, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Brookfield Renewable Partners | 1 | 4 | 11 | 0 | 2.62 |
| Xcel Energy | 1 | 0 | 14 | 2 | 3.00 |
Brookfield Renewable Partners presently has a consensus target price of $38.00, suggesting a potential upside of 15.21%. Xcel Energy has a consensus target price of $92.00, suggesting a potential upside of 16.43%. Given Xcel Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Xcel Energy is more favorable than Brookfield Renewable Partners.
Insider & Institutional Ownership
63.2% of Brookfield Renewable Partners shares are owned by institutional investors. Comparatively, 78.4% of Xcel Energy shares are owned by institutional investors. 0.2% of Xcel Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Risk & Volatility
Brookfield Renewable Partners has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Xcel Energy has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500.
Summary
Xcel Energy beats Brookfield Renewable Partners on 15 of the 18 factors compared between the two stocks.
About Brookfield Renewable Partners
Brookfield Renewable Partners L.P. owns a portfolio of renewable power generating facilities primarily in North America, Colombia, and Brazil. The company generates electricity through hydroelectric, wind, solar, distributed generation, and pumped storage, as well as renewable natural gas, carbon capture and storage, recycling, cogeneration biomass, nuclear services, and power transformation. Brookfield Renewable Partners Limited operates as the general partner of Brookfield Renewable Partners L.P. The company was formerly known as Brookfield Renewable Energy Partners L.P. and changed its name to Brookfield Renewable Partners L.P. in May 2016. Brookfield Renewable Partners L.P. was founded in 1999 and is based in Toronto, Canada. Brookfield Renewable Partners L.P operates as a subsidiary of Brookfield Corporation.
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.
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