Contrasting AES (NYSE:AES) & ReNew Energy Global (NASDAQ:RNW)

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

Analyst Recommendations

This is a summary of current recommendations and price targets for ReNew Energy Global and AES, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ReNew Energy Global	0	4	0	0	2.00
AES	0	8	0	0	2.00

ReNew Energy Global currently has a consensus price target of $6.39, indicating a potential downside of 6.58%. AES has a consensus price target of $15.71, indicating a potential upside of 5.71%. Given AES’s higher probable upside, analysts plainly believe AES is more favorable than ReNew Energy Global.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ReNew Energy Global	7.24%	7.71%	1.07%
AES	14.30%	20.69%	3.62%

Volatility & Risk

ReNew Energy Global has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, AES has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Insider and Institutional Ownership

43.6% of ReNew Energy Global shares are owned by institutional investors. Comparatively, 93.1% of AES shares are owned by institutional investors. 8.7% of ReNew Energy Global shares are owned by insiders. Comparatively, 0.8% of AES 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 and Earnings

This table compares ReNew Energy Global and AES”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ReNew Energy Global	$1.60 billion	1.55	$105.00 million	$0.32	21.38
AES	$12.23 billion	0.87	$910.00 million	$2.62	5.67

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

Summary

AES beats ReNew Energy Global on 8 of the 12 factors compared between the two stocks.

About ReNew Energy Global

ReNew Energy Global Plc generates power through non-conventional and renewable energy sources in India. The company operates through two segments: Wind Power and Solar Power. It develops, builds, owns, and operates utility scale wind and solar energy, hydro energy, and utility-scale firm power projects, as well as distributed solar energy projects that generate energy for commercial and industrial customers. The company provides engineering, procurement, and construction services; operation and maintenance services; consultancy services; and sells renewable energy certificates. ReNew Energy Global Plc was founded in 2011 and is based in London, the United Kingdom.

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.