Head-To-Head Analysis: Ameren (NYSE:AEE) vs. Iberdrola (OTCMKTS:IBDRY)

Iberdrola (OTCMKTS:IBDRY) and Ameren (NYSE:AEE) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Dividends

Iberdrola pays an annual dividend of $3.00 per share and has a dividend yield of 3.2%. Ameren pays an annual dividend of $3.00 per share and has a dividend yield of 3.0%. Iberdrola pays out 63.6% of its earnings in the form of a dividend. Ameren pays out 52.8% 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. Ameren has increased its dividend for 12 consecutive years.

Insider & Institutional Ownership

0.0% of Iberdrola shares are owned by institutional investors. Comparatively, 79.1% of Ameren shares are owned by institutional investors. 0.3% of Ameren shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Iberdrola and Ameren’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iberdrola	15.59%	9.88%	3.80%
Ameren	17.86%	10.95%	3.00%

Valuation & Earnings

This table compares Iberdrola and Ameren”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iberdrola	$51.52 billion	3.02	$7.11 billion	$4.72	19.74
Ameren	$8.80 billion	3.15	$1.46 billion	$5.68	17.65

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Iberdrola and Ameren, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iberdrola	1	4	3	0	2.25
Ameren	0	4	10	0	2.71

Ameren has a consensus target price of $118.92, suggesting a potential upside of 18.62%. Given Ameren’s stronger consensus rating and higher possible upside, analysts plainly believe Ameren is more favorable than Iberdrola.

Risk & Volatility

Iberdrola has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Ameren has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.

Summary

Ameren beats Iberdrola on 11 of the 17 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 Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.