Critical Survey: Korea Electric Power (NYSE:KEP) versus Centrica (OTCMKTS:CPYYY)

Korea Electric Power (NYSE:KEP) and Centrica (OTCMKTS:CPYYY) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Institutional & Insider Ownership

3.8% of Korea Electric Power shares are owned by institutional investors. Comparatively, 0.1% of Centrica shares are owned by institutional investors. 1.0% of Korea Electric Power shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Korea Electric Power and Centrica, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Korea Electric Power 0 0 1 0 3.00
Centrica 0 3 8 0 2.73

Profitability

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

Net Margins Return on Equity Return on Assets
Korea Electric Power 0.16% 0.13% 0.05%
Centrica N/A N/A N/A

Volatility and Risk

Korea Electric Power has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Centrica has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Earnings & Valuation

This table compares Korea Electric Power and Centrica’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Korea Electric Power $47.34 billion 0.29 -$1.88 billion ($1.46) -7.27
Centrica $28.95 billion 0.15 -$1.31 billion $0.37 8.26

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

Summary

Korea Electric Power beats Centrica on 9 of the 13 factors compared between the two stocks.

About Korea Electric Power

Korea Electric Power Corporation, an integrated electric utility company, generates, transmits, and distributes electricity in South Korea and internationally. The company operates through Transmission and Distribution, Electric Power Generation (Nuclear), Electric Power Generation (Non-nuclear), Plant Maintenance & Engineering Service, and Others segments. It generates power from nuclear, coal, oil, liquefied natural gas, internal combustion, combined-cycle, integrated gasification combined cycle, hydro, wind, solar, fuel cell, biogas, and other sources. As of December 31, 2019, the company had a total of 671 generation units, including nuclear, thermal, hydroelectric, and internal combustion units with an installed generation capacity of 83,672 megawatts. Its transmission system consisted of 34,440 circuit kilometers of lines of 765 kilovolts and others, including high-voltage direct current lines, as well as 864 substations with an installed transformer capacity of 326,329 megavolt-amperes; and distribution system included 125,067 megavolt-amperes of transformer capacity and 9,641,891 units of support with a total line length of 504,402 circuit kilometers. The company provides electricity to residential, commercial, educational, industrial, agricultural, street lighting, and overnight power usage. It also offers utility plant maintenance and architectural engineering, information, communication line leasing, resources development, and fly ashes recycling services, as well as sells nuclear fuel. Korea Electric Power Corporation was founded in 1961 and is headquartered in Naju, South Korea.

About Centrica

Centrica plc operates as an integrated energy company in the United Kingdom, the Republic of Ireland, Norway, the United States, Canada, and internationally. The company operates through Centrica Consumer, Centrica Business, and Upstream segments. It supplies gas and electricity to residential customers, as well as offers energy-related services; and generates power from combined cycle gas turbines and nuclear assets. The company also provides installation, repair, and maintenance services for domestic central heating and cooling systems and related appliances, as well as offers maintenance/breakdown services. In addition, it is involved in the procurement, trading, and optimization of energy; and supplies energy efficiency solutions and technologies to residential customers. Further, the company produces and processes gas and oil; develops new fields to maintain reserves; constructs, owns, and exploits infrastructure; and engages in the social enterprise investment fund activities. Additionally, it provides vehicle leasing, commercial, and insurance services, as well as energy management products and services; and operates a gas storage, and franchise network. The company also provides liquefied natural gas vessel chartering services. It primarily supplies energy and services to approximately 26.2 million customers under the British Gas, Bord Gáis, Direct Energy, and Hive brands. The company was formerly known as Yieldtop plc and changed its name to Centrica plc in December 1996. Centrica plc was incorporated in 1995 and is headquartered in Windsor, the United Kingdom.

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