Analyzing Genie Energy (NYSE:GNE) and AES (NYSE:AES)

AES (NYSE:AES) and Genie Energy (NYSE:GNE) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.

Institutional and Insider Ownership

93.1% of AES shares are held by institutional investors. Comparatively, 49.2% of Genie Energy shares are held by institutional investors. 0.6% of AES shares are held by company insiders. Comparatively, 17.4% of Genie Energy shares are held 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.

Profitability

This table compares AES and Genie Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AES	9.47%	18.83%	3.04%
Genie Energy	1.00%	4.47%	2.16%

Dividends

AES pays an annual dividend of $0.70 per share and has a dividend yield of 4.8%. Genie Energy pays an annual dividend of $0.30 per share and has a dividend yield of 2.2%. AES pays out 43.8% of its earnings in the form of a dividend. Genie Energy pays out 37.5% 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. AES has raised its dividend for 12 consecutive years. AES is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares AES and Genie Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AES	$12.28 billion	0.85	$1.68 billion	$1.60	9.21
Genie Energy	$425.20 million	0.86	$12.59 million	$0.80	17.15

AES has higher revenue and earnings than Genie Energy. AES is trading at a lower price-to-earnings ratio than Genie Energy, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

AES has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Genie Energy has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for AES and Genie Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AES	0	4	7	0	2.64
Genie Energy	0	1	0	0	2.00

AES currently has a consensus price target of $23.83, suggesting a potential upside of 61.75%. Given AES’s stronger consensus rating and higher probable upside, equities research analysts plainly believe AES is more favorable than Genie Energy.

Summary

AES beats Genie Energy on 13 of the 17 factors compared between the two stocks.

About AES

The AES Corporation, together with its subsidiaries, operates as a diversified power generation and utility company in the United States and internationally. The company owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses various fuels and technologies to generate electricity, such as coal, gas, hydro, wind, solar, and biomass, as well as renewables comprising energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.

About Genie Energy

Genie Energy Ltd., through its subsidiaries, engages in the supply of electricity and natural gas to residential and small business customers in the United States and internationally. It operates in two segments, GRE and Genie Renewables. The company also develops, constructs, and operates solar energy projects for commercial and industrial customers, as well as its own portfolio; provides energy brokerage and advisory services; markets community solar energy solutions; and manufactures and distributes solar panel, as well as engages in solar installation design and project management activities. Genie Energy Ltd. was incorporated in 2011 and is headquartered in Newark, New Jersey.