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

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 profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

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%

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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Entergy	$11.88 billion	2.96	$2.36 billion	$2.43	33.62
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.

Risk & Volatility

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

Institutional & Insider Ownership

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Entergy and Nextera Energy Partners, as provided by MarketBeat.com.

	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 currently has a consensus target price of $85.25, suggesting a potential upside of 4.34%. Nextera Energy Partners has a consensus target price of $10.00, suggesting a potential upside of 0.00%. Given Entergy’s stronger consensus rating and higher probable upside, analysts plainly believe Entergy is more favorable than Nextera Energy Partners.

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.