Head-To-Head Review: Iberdrola (OTCMKTS:IBDRY) vs. Duke Energy (NYSE:DUK)

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

Analyst Recommendations

This is a summary of recent recommendations for Iberdrola and Duke Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iberdrola	1	5	2	0	2.13
Duke Energy	0	8	9	0	2.53

Duke Energy has a consensus target price of $138.33, indicating a potential upside of 9.50%. Given Duke Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Duke Energy is more favorable than Iberdrola.

Valuation and Earnings

This table compares Iberdrola and Duke Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iberdrola	$51.52 billion	3.14	$7.11 billion	$4.06	23.61
Duke Energy	$32.24 billion	3.06	$4.97 billion	$6.53	19.35

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

Dividends

Iberdrola pays an annual dividend of $2.41 per share and has a dividend yield of 2.5%. Duke Energy pays an annual dividend of $4.26 per share and has a dividend yield of 3.4%. Iberdrola pays out 59.4% of its earnings in the form of a dividend. Duke Energy pays out 65.2% 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. Duke Energy has increased its dividend for 20 consecutive years. Duke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

0.0% of Iberdrola shares are owned by institutional investors. Comparatively, 65.3% of Duke Energy shares are owned by institutional investors. 0.1% of Duke Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Iberdrola has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, Duke Energy has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Iberdrola	13.40%	9.88%	3.81%
Duke Energy	15.49%	9.73%	2.64%

Summary

Duke Energy beats Iberdrola on 9 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 Duke Energy

Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. It operates through two segments: Electric Utilities and Infrastructure (EU&I), and Gas Utilities and Infrastructure (GU&I). The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest. It generates electricity through coal, hydroelectric, natural gas, oil, solar and wind sources, renewables, and nuclear fuel. This segment also engages in the wholesale of electricity to municipalities, electric cooperative utilities, and load-serving entities. The GU&I segment distributes natural gas to residential, commercial, industrial, and power generation natural gas customers; and invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities. The company was formerly known as Duke Energy Holding Corp. and changed its name to Duke Energy Corporation in April 2006. Duke Energy Corporation was founded in 1904 and is headquartered in Charlotte, North Carolina.