Kenon (KEN) versus Its Competitors Critical Review

Kenon (NYSE:KEN) is one of 141 public companies in the “Independent Power & Renewable Electricity Producers” industry, but how does it contrast to its peers? We will compare Kenon to related businesses based on the strength of its earnings, dividends, risk, analyst recommendations, valuation, profitability and institutional ownership.

Institutional & Insider Ownership

13.4% of Kenon shares are held by institutional investors. Comparatively, 35.2% of shares of all “Independent Power & Renewable Electricity Producers” companies are held by institutional investors. 0.1% of Kenon shares are held by insiders. Comparatively, 21.7% of shares of all “Independent Power & Renewable Electricity Producers” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Kenon has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Kenon’s peers have a beta of 0.63, suggesting that their average share price is 37% less volatile than the S&P 500.

Dividends

Kenon pays an annual dividend of $3.85 per share and has a dividend yield of 6.3%. Kenon pays out 215.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Independent Power & Renewable Electricity Producers” companies pay a dividend yield of 6.5% and pay out 187.4% of their earnings in the form of a dividend. Kenon has increased its dividend for 2 consecutive years. Kenon lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Ratings

This is a breakdown of current ratings and target prices for Kenon and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kenon	0	1	0	0	2.00
Kenon Competitors	959	2993	3834	191	2.41

As a group, “Independent Power & Renewable Electricity Producers” companies have a potential upside of 137.47%. Given Kenon’s peers stronger consensus rating and higher probable upside, analysts plainly believe Kenon has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares Kenon and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Kenon	$871.63 million	$66.27 million	34.33
Kenon Competitors	$36.26 billion	$831.21 million	-4.26

Kenon’s peers have higher revenue and earnings than Kenon. Kenon is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Kenon and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kenon	10.03%	4.46%	2.42%
Kenon Competitors	-879.38%	9.92%	0.66%

Summary

Kenon peers beat Kenon on 11 of the 15 factors compared.

Kenon Company Profile

Kenon Holdings Ltd. is a Singapore-based holding company focused primarily on the energy sector. Its main business is its interest in OPC Energy, a power-generation company with operations in Israel and the United States. Through OPC Energy and its subsidiaries, Kenon is involved in developing, owning and operating electricity-generation facilities, including conventional power plants and renewable-energy projects. Its U.S. activities include the CPV Group, which develops and operates power and renewable-energy assets.