Critical Review: UIL Holdings Corporation (UIL) vs. Calpine Corporation (CPN)
UIL Holdings Corporation (NYSE: UIL) and Calpine Corporation (NYSE:CPN) are both mid-cap electric utilities – nec companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.
This is a summary of current ratings and recommmendations for UIL Holdings Corporation and Calpine Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|UIL Holdings Corporation||0||0||0||0||N/A|
Calpine Corporation has a consensus price target of $14.86, indicating a potential downside of 0.99%. Given Calpine Corporation’s higher possible upside, analysts clearly believe Calpine Corporation is more favorable than UIL Holdings Corporation.
Insider and Institutional Ownership
95.8% of Calpine Corporation shares are held by institutional investors. 1.2% of Calpine Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares UIL Holdings Corporation and Calpine Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|UIL Holdings Corporation||N/A||N/A||N/A||$2.12||23.63|
|Calpine Corporation||$6.72 billion||0.81||$92.00 million||($0.07)||-214.43|
Calpine Corporation has higher revenue and earnings than UIL Holdings Corporation. Calpine Corporation is trading at a lower price-to-earnings ratio than UIL Holdings Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares UIL Holdings Corporation and Calpine Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|UIL Holdings Corporation||4.73%||4.50%||1.21%|
Calpine Corporation beats UIL Holdings Corporation on 5 of the 9 factors compared between the two stocks.
About UIL Holdings Corporation
UIL Holdings Corporation (UIL Holdings) is engaged in the ownership of its operating regulated utility businesses. The utility businesses consist of the electric distribution and transmission operations of The United Illuminating Company (UI) and the natural gas transportation, distribution and sales operations of The Southern Connecticut Gas Company (SCG), Connecticut Natural Gas Corporation (CNG) and The Berkshire Gas Company. The Company operates in two segments: Electric Distribution and Transmission, which is engaged in purchase, transmission, distribution and sale of electricity for residential, commercial and industrial purposes, and Gas Distribution, which is engaged in natural gas transportation, distribution and sales operations.
About Calpine Corporation
Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. As of December 31, 2016, the Company’s portfolio consisted of two types of power generation technologies, including natural gas-fired combustion turbines, such as combined-cycle plants, and renewable geothermal conventional steam turbines. As of December 31, 2016, the Company’s portfolio included 80 power plants, including one under construction, with an aggregate generation capacity of 25,908 Megawatt (MW) and 828 MW under construction. As of December 31, 2016, it had four MW of capacity from solar power generation technology at its Vineland Solar Energy Center in New Jersey.
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