8point3 Energy Partners (NASDAQ: CAFD) and NextEra Energy (NYSE:NEE) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitabiliy, risk and analyst recommendations.

Profitability

This table compares 8point3 Energy Partners and NextEra Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
8point3 Energy Partners 23.87% 1.94% 1.11%
NextEra Energy 24.26% 11.88% 3.40%

Analyst Ratings

This is a summary of recent recommendations and price targets for 8point3 Energy Partners and NextEra Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
8point3 Energy Partners 2 9 3 0 2.07
NextEra Energy 0 1 8 0 2.89

8point3 Energy Partners presently has a consensus target price of $15.54, suggesting a potential upside of 8.00%. NextEra Energy has a consensus target price of $150.56, suggesting a potential upside of 2.04%. Given 8point3 Energy Partners’ higher probable upside, research analysts plainly believe 8point3 Energy Partners is more favorable than NextEra Energy.

Insider and Institutional Ownership

55.6% of 8point3 Energy Partners shares are owned by institutional investors. Comparatively, 77.0% of NextEra Energy shares are owned by institutional investors. 0.5% of NextEra Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares 8point3 Energy Partners and NextEra Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
8point3 Energy Partners $67.15 million N/A $51.64 million N/A N/A
NextEra Energy $16.88 billion 4.10 $8.30 billion $8.73 16.90

NextEra Energy has higher revenue and earnings than 8point3 Energy Partners.

Dividends

8point3 Energy Partners pays an annual dividend of $1.06 per share and has a dividend yield of 7.4%. NextEra Energy pays an annual dividend of $3.93 per share and has a dividend yield of 2.7%. NextEra Energy pays out 45.0% of its earnings in the form of a dividend. 8point3 Energy Partners has increased its dividend for 7 consecutive years. 8point3 Energy Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

8point3 Energy Partners has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, NextEra Energy has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Summary

NextEra Energy beats 8point3 Energy Partners on 9 of the 15 factors compared between the two stocks.

8point3 Energy Partners Company Profile

8point3 Energy Partners LP owns, operates and acquires solar energy generation projects. As of November 30, 2016, Company’s portfolio comprised interests in 642 Megawatt (MW) of solar energy projects. The Company is developing projects under utility, commercial and industrial (C&I) and residential categories. As of November 30, 2016, the Company owned interests in nine utility-scale solar energy projects; four C&I solar energy projects, and a portfolio of residential Distributed generation (DG) Solar assets. The Company’s utility project portfolio comprises projects, which include Maryland Solar, Solar Gen 2, Lost Hills Blackwell, North Star, RPU, Quinto, Hooper and Kingbird. The Company’s C&I projects comprise UC Davis, Macy’s California, Macy’s Maryland and Kern. The Company’s residential portfolio targets homeowners in the United States.

NextEra Energy Company Profile

NextEra Energy, Inc. (NEE) is a holding company. The Company is an electric power companies in North America and, through its subsidiary NextEra Energy Resources, LLC (NEER) and its affiliated entities, is the generator of renewable energy from the wind and sun. NEE also owns and/or operates generation, transmission and distribution facilities to support its services to retail and wholesale customers, and has investments in gas infrastructure assets. Its segments include FPL and NEER. Florida Power & Light Company (FPL) is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. NEER is a diversified clean energy company with a business strategy that emphasizes the development, acquisition and operation of long-term contracted assets with a focus on renewable projects. NEER owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets.

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