Iberdrola (OTCMKTS:IBDRY) versus American Electric Power (NASDAQ:AEP) Head-To-Head Analysis

Iberdrola (OTCMKTS:IBDRY) and American Electric Power (NASDAQ:AEP) are both large-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Institutional & Insider Ownership

0.0% of Iberdrola shares are held by institutional investors. Comparatively, 75.2% of American Electric Power shares are held by institutional investors. 0.1% of American Electric Power shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Iberdrola has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, American Electric Power has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Dividends

Iberdrola pays an annual dividend of $2.41 per share and has a dividend yield of 2.7%. American Electric Power pays an annual dividend of $3.80 per share and has a dividend yield of 2.9%. Iberdrola pays out 59.4% of its earnings in the form of a dividend. American Electric Power pays out 55.8% 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. American Electric Power has raised its dividend for 15 consecutive years. American Electric Power is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Iberdrola and American Electric Power, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iberdrola	1	5	1	0	2.00
American Electric Power	0	9	12	1	2.64

American Electric Power has a consensus price target of $141.57, suggesting a potential upside of 9.81%. Given American Electric Power’s stronger consensus rating and higher possible upside, analysts clearly believe American Electric Power is more favorable than Iberdrola.

Earnings & Valuation

This table compares Iberdrola and American Electric Power”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iberdrola	$51.52 billion	2.98	$7.11 billion	$4.06	22.37
American Electric Power	$21.88 billion	3.21	$3.58 billion	$6.81	18.93

Iberdrola has higher revenue and earnings than American Electric Power. American Electric Power is trading at a lower price-to-earnings ratio than Iberdrola, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Iberdrola and American Electric Power’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iberdrola	13.40%	9.88%	3.81%
American Electric Power	16.29%	10.21%	2.89%

Summary

American Electric Power beats Iberdrola on 13 of the 18 factors compared between the two stocks.

About Iberdrola

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain, the United Kingdom, the United States, Mexico, Brazil, Germany, France, and Australia. It generates electricity from renewable sources, such as onshore and offshore wind, hydro, photovoltaic, combined cycle gas, and conventional nuclear, as well as through batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; energy retail supply activities, such as gas and electricity, and other products and services, including hydrogen, as well as non-renewable generation; and production of green hydrogen. It has a total installed capacity of 62,871 MW. In addition, the company offers heat pumps, self-consumption, electric mobility, solar, etc. services to residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is based in Bilbao, Spain.

About American Electric Power

American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments. The company generates electricity using coal and lignite, natural gas, renewable, nuclear, hydro, solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. American Electric Power Company, Inc. was incorporated in 1906 and is headquartered in Columbus, Ohio.