Contrasting Entergy (NYSE:ETR) & Nextera Energy Partners (NYSE:NEP)

Entergy (NYSE:ETR) and Nextera Energy Partners (NYSE:NEP) are both utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Entergy and Nextera Energy Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Entergy	0	5	9	1	2.73
Nextera Energy Partners	2	0	0	0	1.00

Entergy presently has a consensus price target of $85.25, suggesting a potential upside of 3.26%. Nextera Energy Partners has a consensus price target of $10.00, suggesting a potential upside of 0.00%. Given Entergy’s stronger consensus rating and higher probable upside, equities analysts clearly believe Entergy is more favorable than Nextera Energy Partners.

Profitability

This table compares Entergy and Nextera Energy Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Entergy	8.90%	10.68%	2.49%
Nextera Energy Partners	-0.73%	1.34%	0.85%

Insider & Institutional Ownership

88.1% of Entergy shares are held by institutional investors. Comparatively, 66.0% of Nextera Energy Partners shares are held by institutional investors. 0.4% of Entergy shares are held by insiders. Comparatively, 0.1% of Nextera Energy Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Entergy and Nextera Energy Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Entergy	$11.88 billion	2.99	$2.36 billion	$2.43	33.98
Nextera Energy Partners	$1.23 billion	0.00	-$10.00 million	($0.10)	N/A

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

Dividends

Entergy pays an annual dividend of $2.40 per share and has a dividend yield of 2.9%. Nextera Energy Partners pays an annual dividend of $3.67 per share. Entergy pays out 98.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nextera Energy Partners pays out -3,670.0% of its earnings in the form of a dividend.

Risk and Volatility

Entergy has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, Nextera Energy Partners has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Summary

Entergy beats Nextera Energy Partners on 14 of the 16 factors compared between the two stocks.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and retail distribution of electricity in the United States. It generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, including the City of New Orleans; and distributes natural gas. It also engages in the ownership of interests in non-nuclear power plants that sell electric power to wholesale customers, as well as provides decommissioning services to other nuclear power plant owners. It generates electricity through gas, nuclear, coal, hydro, and solar power sources. The company sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company’s power plants have approximately 24,000 megawatts of electric generating capacity. It delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1913 and is headquartered in New Orleans, Louisiana.

About Nextera Energy Partners

NextEra Energy Partners LP engages in the acquisition, management, and ownership of contracted clean energy projects with long-term cash flows. It owns interests in wind and solar projects in North America and natural gas infrastructure assets in Texas. The company was founded on March 6, 2014 and is headquartered in Juno Beach, FL.