TransAlta (NYSE:TAC) & ReNew Energy Global (NASDAQ:RNW) Head to Head Comparison

ReNew Energy Global (NASDAQ:RNW) and TransAlta (NYSE:TAC) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares ReNew Energy Global and TransAlta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ReNew Energy Global	7.18%	7.57%	1.05%
TransAlta	-2.76%	8.85%	0.66%

Institutional and Insider Ownership

43.6% of ReNew Energy Global shares are owned by institutional investors. Comparatively, 59.0% of TransAlta shares are owned by institutional investors. 8.7% of ReNew Energy Global shares are owned by insiders. Comparatively, 13.1% of TransAlta shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

ReNew Energy Global has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, TransAlta has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for ReNew Energy Global and TransAlta, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ReNew Energy Global	0	3	0	0	2.00
TransAlta	1	1	6	1	2.78

ReNew Energy Global presently has a consensus target price of $6.39, suggesting a potential downside of 6.30%. TransAlta has a consensus target price of $24.50, suggesting a potential upside of 96.24%. Given TransAlta’s stronger consensus rating and higher possible upside, analysts plainly believe TransAlta is more favorable than ReNew Energy Global.

Earnings & Valuation

This table compares ReNew Energy Global and TransAlta”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ReNew Energy Global	$1.60 billion	1.54	$105.00 million	$0.31	22.00
TransAlta	$2.27 billion	1.74	-$98.77 million	($0.18)	-69.36

ReNew Energy Global has higher earnings, but lower revenue than TransAlta. TransAlta is trading at a lower price-to-earnings ratio than ReNew Energy Global, indicating that it is currently the more affordable of the two stocks.

Summary

TransAlta beats ReNew Energy Global on 9 of the 15 factors compared between the two stocks.

About ReNew Energy Global

ReNew Energy Global Plc generates power through non-conventional and renewable energy sources in India. The company operates through two segments: Wind Power and Solar Power. It develops, builds, owns, and operates utility scale wind and solar energy, hydro energy, and utility-scale firm power projects, as well as distributed solar energy projects that generate energy for commercial and industrial customers. The company provides engineering, procurement, and construction services; operation and maintenance services; consultancy services; and sells renewable energy certificates. ReNew Energy Global Plc was founded in 2011 and is based in London, the United Kingdom.

About TransAlta

TransAlta Corporation engages in the development, production, and sale of electric energy. It operates through Hydro, Wind and Solar, Gas, Energy Transition, and Energy Marketing segments. The Hydro segment holds interest of approximately 922 megawatts (MW) of owned hydroelectric generating capacity located in Alberta, British Columbia, and Ontario. The Wind and Solar segment has a net ownership interest of approximately 2,057 MW of owned wind and solar electrical-generating capacity, as well as battery storage facilities located in Alberta, Ontario, New Brunswick, and Québec in Canada; the states of Massachusetts, Minnesota, New Hampshire, North Carolina, Pennsylvania, Washington, and Wyoming in the United States; and the state of Western Australia. The Gas segment has a net ownership interest of approximately 2,775 MW of owned gas electrical-generating capacity, and facilities located in Alberta, Ontario, Michigan, and the state of Western Australia. The Energy Transition segment has a net ownership interest of approximately 671 MW of owned coal electrical-generating capacity, as well as operates the Skookumchuck hydro facility in Centralia; and engages in the highvale mine and the mine reclamation activities. The Energy Marketing segment is involved in the trading of power, natural gas, and environmental products. It serves customers in various industry segments, including commercial real estate, municipal, manufacturing, industrial, hospitality, finance, and oil and gas. TransAlta Corporation was founded in 1909 and is headquartered in Calgary, Canada.