Contrasting IDACORP (IDA) & TerraForm Power (TERP)
IDACORP (NASDAQ: TERP) and TerraForm Power (NASDAQ:TERP) are both mid-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
This table compares IDACORP and TerraForm Power’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
IDACORP has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, TerraForm Power has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.
Valuation & Earnings
This table compares IDACORP and TerraForm Power’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|IDACORP||$1.35 billion||3.59||$212.41 million||$4.21||22.81|
|TerraForm Power||$610.47 million||3.81||-$164.18 million||($1.21)||-9.19|
IDACORP has higher revenue and earnings than TerraForm Power. TerraForm Power is trading at a lower price-to-earnings ratio than IDACORP, indicating that it is currently the more affordable of the two stocks.
IDACORP pays an annual dividend of $2.36 per share and has a dividend yield of 2.5%. TerraForm Power pays an annual dividend of $0.76 per share and has a dividend yield of 6.8%. IDACORP pays out 56.1% of its earnings in the form of a dividend. TerraForm Power pays out -62.8% 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. IDACORP has increased its dividend for 6 consecutive years. TerraForm Power is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current recommendations and price targets for IDACORP and TerraForm Power, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
IDACORP presently has a consensus target price of $82.50, suggesting a potential downside of 14.10%. TerraForm Power has a consensus target price of $13.50, suggesting a potential upside of 21.40%. Given TerraForm Power’s stronger consensus rating and higher probable upside, analysts clearly believe TerraForm Power is more favorable than IDACORP.
Insider & Institutional Ownership
76.6% of IDACORP shares are held by institutional investors. Comparatively, 85.3% of TerraForm Power shares are held by institutional investors. 0.7% of IDACORP shares are held by insiders. Comparatively, 0.0% of TerraForm Power shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
IDACORP beats TerraForm Power on 9 of the 17 factors compared between the two stocks.
IDACORP Company Profile
IDACORP, Inc., through its subsidiary, Idaho Power Company, engages in the generation, transmission, distribution, purchase, and sale of electric energy in the United States. It operates 17 hydroelectric generating plants located in southern Idaho and eastern Oregon, as well as 3 natural gas-fired plants in southern Idaho; and owns interests in 3 coal-fired steam electric generating plants located in Wyoming, Nevada, and Oregon. As of December 31, 2017, the company provided electric service to approximately 545,000 general business customers; and had a network of approximately 4,857 pole-miles of high-voltage transmission lines, 24 step-up transmission substations located at power plants, 24 transmission substations, 10 switching stations, and 223 energized distribution substations, as well as approximately 27,441 pole-miles of distribution lines. Its principal commercial and industrial customers are involved in food processing, electronics and general manufacturing, agriculture, health care, and winter recreation activities. The company, through its other subsidiaries, invests in housing and other real estate investments. IDACORP, Inc. was founded in 1915 and is headquartered in Boise, Idaho.
TerraForm Power Company Profile
TerraForm Power, Inc., together with its subsidiaries, owns and operates clean power generation assets. As of December 31, 2017, its portfolio consisted of solar and wind projects located in the United States, Canada, the United Kingdom, and Chile with a combined nameplate capacity of 2,606.4 megawatts. The company was formerly known as SunEdison Yieldco, Inc. and changed its name to TerraForm Power, Inc. in May 2014. TerraForm Power, Inc. was founded in 2014 and is headquartered in New York, New York.
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