Analyzing Central Puerto (NYSE:CEPU) and Meren Energy (OTCMKTS:AOIFF)

Central Puerto (NYSE:CEPU) and Meren Energy (OTCMKTS:AOIFF) are both energy companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Valuation and Earnings

This table compares Central Puerto and Meren Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Central Puerto	$1,230.28 billion	0.00	$277.08 million	$2.08	7.70
Meren Energy	N/A	N/A	-$279.10 million	($0.52)	-2.50

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

Profitability

This table compares Central Puerto and Meren Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Central Puerto	37.86%	15.93%	11.06%
Meren Energy	N/A	3.52%	1.68%

Risk & Volatility

Central Puerto has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Meren Energy has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Institutional and Insider Ownership

3.0% of Central Puerto shares are owned by institutional investors. 0.1% of Central Puerto shares are owned by company insiders. Comparatively, 1.0% of Meren Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Central Puerto pays an annual dividend of $0.31 per share and has a dividend yield of 1.9%. Meren Energy pays an annual dividend of $0.14 per share and has a dividend yield of 10.8%. Central Puerto pays out 14.9% of its earnings in the form of a dividend. Meren Energy pays out -26.9% 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. Meren Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and recommmendations for Central Puerto and Meren Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Central Puerto	0	1	1	0	2.50
Meren Energy	0	0	0	0	0.00

Central Puerto presently has a consensus target price of $17.50, suggesting a potential upside of 9.31%. Given Central Puerto’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Central Puerto is more favorable than Meren Energy.

Summary

Central Puerto beats Meren Energy on 12 of the 15 factors compared between the two stocks.

About Central Puerto

Central Puerto S.A. engages in the electric power generation in Argentina. It operates through three segments: Electric Power Generation from Conventional Sources, Electric Power Generation from Renewable Sources, and Natural Gas Transport and Distribution. The company generates energy through thermal, hydroelectric, and wind farms. It also engages in the natural gas transport and distribution business. Central Puerto S.A. was founded in 1898 and is based in Buenos Aires, Argentina.

About Meren Energy

Africa Oil Corp., together with its subsidiaries, operates as an oil and gas exploration and production company in Kenya, Nigeria, and South Africa. The company holds interests in producing and development assets in deep-water Nigeria, and development assets in Kenya. It also has a portfolio of exploration and appraisal assets in Namibia, Nigeria, South Africa, and Kenya, as well as Guyana and Senegal Guinea Bissau Joint Development Zone. The company was formerly known as Canmex Minerals Corporation and changed its name to Africa Oil Corp. in August 2007. Africa Oil Corp. was incorporated in 1983 and is headquartered in Vancouver, Canada.