PPL Corporation (PPL) & Avangrid (AGR) Critical Contrast
PPL Corporation (NYSE: PPL) and Avangrid (NYSE:AGR) are both large-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.
Insider and Institutional Ownership
71.0% of PPL Corporation shares are held by institutional investors. Comparatively, 13.2% of Avangrid shares are held by institutional investors. 0.4% of PPL Corporation shares are held by insiders. Comparatively, 0.3% of Avangrid shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent recommendations for PPL Corporation and Avangrid, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PPL Corporation currently has a consensus target price of $38.36, indicating a potential upside of 0.91%. Avangrid has a consensus target price of $46.17, indicating a potential downside of 2.06%. Given PPL Corporation’s higher possible upside, equities research analysts plainly believe PPL Corporation is more favorable than Avangrid.
PPL Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.2%. Avangrid pays an annual dividend of $1.73 per share and has a dividend yield of 3.7%. PPL Corporation pays out 66.1% of its earnings in the form of a dividend. Avangrid pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avangrid has increased its dividend for 5 consecutive years. PPL Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
PPL Corporation has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Avangrid has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.
Earnings & Valuation
This table compares PPL Corporation and Avangrid’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PPL Corporation||$7.40 billion||3.52||$4.04 billion||$2.39||15.90|
|Avangrid||$6.00 billion||2.43||$1.94 billion||$2.18||21.62|
PPL Corporation has higher revenue and earnings than Avangrid. PPL Corporation is trading at a lower price-to-earnings ratio than Avangrid, indicating that it is currently the more affordable of the two stocks.
This table compares PPL Corporation and Avangrid’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
PPL Corporation beats Avangrid on 12 of the 17 factors compared between the two stocks.
About PPL Corporation
PPL Corporation (PPL) is a utility holding company. Through its subsidiaries, PPL delivers electricity to customers in the United Kingdom, Pennsylvania, Kentucky, Virginia and Tennessee; delivers natural gas to customers in Kentucky, and generates electricity from power plants in Kentucky. PPL operates through U.K. Regulated Segment, Kentucky Regulated Segment and Pennsylvania Regulated Segment. The U.K. Regulated Segment consists of PPL Global, which includes PPL WPD Limited’s (WPD) regulated electricity distribution operations, the results of hedging the translation of WPD’s earnings from British pound sterling into United States dollars, and certain costs, such as the United States income taxes, administrative costs and allocated financing costs. Kentucky Regulated segment consists of the operations of Louisville Gas and Electric Company (LG&E) and KU Energy LLC (LKE). The Pennsylvania Regulated segment consists of PPL Electric Utilities Corporation (PPL Electric).
Avangrid, Inc. is an energy and utility company. The Company operates through three segments: Networks, Renewables and Gas. The Networks segment includes all the energy transmission and distribution activities, and any other regulated activity originating in New York and Maine, and regulated electric distribution, electric transmission and gas distribution activities originating in Connecticut and Massachusetts. The Renewables segment owns, develops, constructs and/or operates electricity generation, including renewable and thermal generators, and associated transmission facilities. The Renewables segment includes activities relating to renewable energy, mainly wind energy generation and trading related with such activities. The Gas segment operates a natural gas storage and natural gas trading business through its subsidiaries, Enstor, Inc. and Enstor Energy Services, LLC.
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