Analyzing Ormat Technologies (ORA) & WEC Energy Group (WEC)
Ormat Technologies (NYSE: ORA) and WEC Energy Group (NYSE:WEC) are both mid-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Ormat Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.3%. Ormat Technologies pays out 13.7% of its earnings in the form of a dividend. WEC Energy Group pays out 68.4% 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. WEC Energy Group has raised its dividend for 7 consecutive years. WEC Energy Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
46.3% of Ormat Technologies shares are owned by institutional investors. Comparatively, 72.6% of WEC Energy Group shares are owned by institutional investors. 14.7% of Ormat Technologies shares are owned by insiders. Comparatively, 1.0% of WEC Energy Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Ormat Technologies and WEC Energy Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ormat Technologies||$662.59 million||5.08||$93.93 million||$2.33||28.58|
|WEC Energy Group||$7.47 billion||2.67||$940.20 million||$3.04||20.76|
WEC Energy Group has higher revenue and earnings than Ormat Technologies. WEC Energy Group is trading at a lower price-to-earnings ratio than Ormat Technologies, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Ormat Technologies has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500.
This is a summary of current recommendations for Ormat Technologies and WEC Energy Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WEC Energy Group||1||7||1||0||2.00|
Ormat Technologies presently has a consensus price target of $68.17, suggesting a potential upside of 2.38%. WEC Energy Group has a consensus price target of $65.75, suggesting a potential upside of 4.18%. Given WEC Energy Group’s higher possible upside, analysts clearly believe WEC Energy Group is more favorable than Ormat Technologies.
This table compares Ormat Technologies and WEC Energy Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WEC Energy Group||12.79%||10.62%||3.18%|
Ormat Technologies beats WEC Energy Group on 9 of the 17 factors compared between the two stocks.
Ormat Technologies Company Profile
Ormat Technologies, Inc. is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal and recovered energy-based power plants. Its equipment manufacturing operations are located in Israel. It conducts its business activities in two business segments: Electricity segment and Product segment. The Electricity segment develops, builds, owns and operates geothermal and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world, and sells the electricity it generates. The Product Segment designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and remote power units, and provide services relating to the engineering, procurement, construction, operation and maintenance of geothermal, and recovered energy-based power plants. It manufactures products that produce electricity from recovered energy or waste heat.
WEC Energy Group Company Profile
WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.
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