Critical Comparison: Ameren (NYSE:AEE) versus Companhia Paranaense de Energia – Copel (NYSE:ELPC)

Ameren (NYSE:AEE) and Companhia Paranaense de Energia – Copel (NYSE:ELPC) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Risk & Volatility

Ameren has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Companhia Paranaense de Energia – Copel has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500.

Insider & Institutional Ownership

79.1% of Ameren shares are owned by institutional investors. 0.3% of Ameren shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Ameren pays an annual dividend of $3.00 per share and has a dividend yield of 2.8%. Companhia Paranaense de Energia – Copel pays an annual dividend of $0.58 per share and has a dividend yield of 4.6%. Ameren pays out 54.0% of its earnings in the form of a dividend. Companhia Paranaense de Energia – Copel pays out 101.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameren has raised its dividend for 12 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ameren and Companhia Paranaense de Energia – Copel, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameren	0	6	7	1	2.64
Companhia Paranaense de Energia – Copel	0	2	1	1	2.75

Ameren presently has a consensus target price of $117.31, indicating a potential upside of 7.60%. Companhia Paranaense de Energia – Copel has a consensus target price of $10.40, indicating a potential downside of 17.66%. Given Ameren’s higher possible upside, analysts clearly believe Ameren is more favorable than Companhia Paranaense de Energia – Copel.

Profitability

This table compares Ameren and Companhia Paranaense de Energia – Copel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ameren	17.17%	10.94%	2.99%
Companhia Paranaense de Energia – Copel	N/A	N/A	N/A

Valuation and Earnings

This table compares Ameren and Companhia Paranaense de Energia – Copel”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameren	$8.80 billion	3.43	$1.46 billion	$5.56	19.61
Companhia Paranaense de Energia – Copel	$27.29 billion	0.34	$424.24 million	$0.57	22.16

Ameren has higher earnings, but lower revenue than Companhia Paranaense de Energia – Copel. Ameren is trading at a lower price-to-earnings ratio than Companhia Paranaense de Energia – Copel, indicating that it is currently the more affordable of the two stocks.

Summary

Ameren beats Companhia Paranaense de Energia – Copel on 13 of the 17 factors compared between the two stocks.

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.

About Companhia Paranaense de Energia – Copel

Companhia Paranaense de Energia – COPEL engages in the generation, transformation, distribution, and sale of electricity to industrial, residential, commercial, rural, and other customers in Brazil. The company operates through Power Generation and Transmission, Power Distribution, GAS, Power Sale, and Holding and Services segments. It is also involved in the piped natural gas distribution. The company operates hydroelectric, wind, and thermoelectric plants; and owns and operates transmission and distribution lines. It holds concessions to distribute electricity in municipalities in the State of Paraná and in the municipality of Porto União in the State of Santa Catarina. Companhia Paranaense de Energia COPEL was founded in 1954 and is headquartered in Curitiba, Brazil.