Critical Review: NextEra Energy Partners (NYSE:NEP) & Altus Power (NYSE:AMPS)

NextEra Energy Partners (NYSE:NEP) and Altus Power (NYSE:AMPS) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Dividends

NextEra Energy Partners pays an annual dividend of $3.67 per share and has a dividend yield of 20.5%. Altus Power pays an annual dividend of $1.59 per share and has a dividend yield of 41.7%. NextEra Energy Partners pays out 168.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Altus Power pays out 722.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

NextEra Energy Partners has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Altus Power has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Valuation & Earnings

This table compares NextEra Energy Partners and Altus Power”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NextEra Energy Partners	$1.17 billion	1.43	$200.00 million	$2.18	8.19
Altus Power	$185.99 million	3.29	-$9.35 million	$0.22	17.32

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

Profitability

This table compares NextEra Energy Partners and Altus Power’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NextEra Energy Partners	17.47%	-1.07%	-0.68%
Altus Power	19.18%	4.79%	1.16%

Insider & Institutional Ownership

66.0% of NextEra Energy Partners shares are owned by institutional investors. Comparatively, 46.5% of Altus Power shares are owned by institutional investors. 0.1% of NextEra Energy Partners shares are owned by insiders. Comparatively, 24.3% of Altus Power shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for NextEra Energy Partners and Altus Power, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NextEra Energy Partners	2	11	4	0	2.12
Altus Power	1	1	5	2	2.89

NextEra Energy Partners currently has a consensus target price of $26.00, suggesting a potential upside of 45.54%. Altus Power has a consensus target price of $5.21, suggesting a potential upside of 36.86%. Given NextEra Energy Partners’ higher possible upside, research analysts clearly believe NextEra Energy Partners is more favorable than Altus Power.

Summary

Altus Power beats NextEra Energy Partners on 10 of the 17 factors compared between the two stocks.

About NextEra Energy Partners

NextEra Energy Partners, LP acquires, owns, and manages contracted clean energy projects in the United States. It owns a portfolio of contracted renewable generation assets consisting of wind, solar, and battery storage projects. The company owns contracted natural gas pipeline assets. NextEra Energy Partners, LP was incorporated in 2014 and is based in Juno Beach, Florida.

About Altus Power

Altus Power, Inc., a clean electrification company, develops, owns, constructs, and operates roof, ground, and carport-based photovoltaic solar energy generation and storage systems. It serves commercial, industrial, public sector, and community solar customers. Altus Power, Inc. was founded in 2013 and is headquartered in Stamford, Connecticut.