Financial Review: Atlantica Yield (AY) vs. Enel S.p.A. ADS (ENLAY)


Atlantica Yield (NASDAQ:AY) and Enel S.p.A. ADS (OTCMKTS:ENLAY) are both utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Atlantica Yield and Enel S.p.A. ADS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield -3.17% 3.21% 0.59%
Enel S.p.A. ADS 5.32% 7.98% 2.53%

Earnings & Valuation

This table compares Atlantica Yield and Enel S.p.A. ADS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantica Yield $1.01 billion 1.95 -$111.80 million ($0.18) -109.00
Enel S.p.A. ADS $84.31 billion 0.65 $4.27 billion N/A N/A

Enel S.p.A. ADS has higher revenue and earnings than Atlantica Yield.

Institutional and Insider Ownership

49.7% of Atlantica Yield shares are held by institutional investors. Comparatively, 0.1% of Enel S.p.A. ADS shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Atlantica Yield pays an annual dividend of $1.36 per share and has a dividend yield of 6.9%. Enel S.p.A. ADS pays an annual dividend of $0.17 per share and has a dividend yield of 3.1%. Atlantica Yield pays out -755.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Atlantica Yield and Enel S.p.A. ADS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield 0 0 5 0 3.00
Enel S.p.A. ADS 1 0 2 0 2.33

Atlantica Yield currently has a consensus target price of $26.13, suggesting a potential upside of 33.15%. Given Atlantica Yield’s stronger consensus rating and higher possible upside, research analysts clearly believe Atlantica Yield is more favorable than Enel S.p.A. ADS.

Volatility and Risk

Atlantica Yield has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Enel S.p.A. ADS has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Summary

Atlantica Yield beats Enel S.p.A. ADS on 8 of the 14 factors compared between the two stocks.

About Atlantica Yield

Atlantica Yield plc acquires, owns, and manages renewable energy natural gas, power, electric transmission lines, and water assets in North America, South America, Spain, Algeria, and South Africa. As of December 31, 2017, it had 22 assets, including 1,446 megawatts (MW) of renewable energy generation assets comprising solar power and wind plants; 300 MW of natural gas power generation assets that produce electricity and steam from natural gas; 1,099 miles of electric transmission lines; and desalination plants with an aggregate capacity of 10.5 million cubic feet per day. The company was formerly known as Abengoa Yield plc and changed its name to Atlantica Yield plc in May 2016. Atlantica Yield plc was incorporated in 2013 and is based in Brentford, the United Kingdom.

About Enel S.p.A. ADS

Enel SpA, together with its subsidiaries, operates as an integrated electricity and gas company in South America, Europe, North and Central America, Africa, and Asia. The company generates, transmits, distributes, transports, purchases, and sells electricity; generates heat; and produces distributes, transports, and sells natural gas. It also engages in the transportation, storage, and regasification of liquefied natural gas (LNG); energy and infrastructure engineering; the design, development, construction, and operation of generation plants and grids; security and real estate activities; the management and maintenance of power plants; research and development in science and engineering; fuel supply; research and testing, inspection, certification, and engineering and consulting activities; and business consulting, administrative, management consulting, and corporate planning operations. In addition, the company is involved in the construction of electric facilities and port infrastructure; product, plant, and equipment certification; legal, trading, and mining activities; the marketing of energy products; training activities; personnel administration activities, as well as offers information technology and business services; and metering, remote control, and connectivity services through power line communication. Further, it designs, constructs, and operates merchant lines; operates optical fiber network; offers public lighting systems, fuel trading and logistics, factoring, electrical engineering, and water systems, and photovoltaic systems; and provides finance, environmental studies, and electronic plant installation and repairing services. It operates various hydroelectric, wind, renewable, geothermal, solar, thermoelectric, nuclear, and other renewable sources, and co-generation power plants with an installed capacity of approximately 85 gigawatts. The company was founded in 1962 and is headquartered in Rome, Italy.

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