Critical Analysis: Talen Energy (NASDAQ:TLN) and Enlight Renewable Energy (NASDAQ:ENLT)

Enlight Renewable Energy (NASDAQ:ENLT) and Talen Energy (NASDAQ:TLN) are both large-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for Enlight Renewable Energy and Talen Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enlight Renewable Energy	2	2	3	0	2.14
Talen Energy	0	3	12	0	2.80

Enlight Renewable Energy presently has a consensus price target of $60.17, indicating a potential downside of 34.78%. Talen Energy has a consensus price target of $448.58, indicating a potential upside of 20.44%. Given Talen Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Talen Energy is more favorable than Enlight Renewable Energy.

Risk and Volatility

Enlight Renewable Energy has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Talen Energy has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500.

Insider and Institutional Ownership

38.9% of Enlight Renewable Energy shares are owned by institutional investors. Comparatively, 0.4% of Talen Energy shares are owned by institutional investors. 0.8% of Talen Energy 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.

Earnings and Valuation

This table compares Enlight Renewable Energy and Talen Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enlight Renewable Energy	$582.26 million	18.79	$132.10 million	$0.43	214.53
Talen Energy	$2.58 billion	6.55	-$219.00 million	($0.67)	-555.90

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

Profitability

This table compares Enlight Renewable Energy and Talen Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enlight Renewable Energy	9.47%	2.48%	0.61%
Talen Energy	-0.63%	41.58%	6.00%

Summary

Talen Energy beats Enlight Renewable Energy on 8 of the 14 factors compared between the two stocks.

About Enlight Renewable Energy

Enlight Renewable Energy Ltd operates a renewable energy platform in Israel, Central-Eastern Europe, Western Europe, and the United States. The company develops, finances, constructs, owns, and operates utility-scale renewable energy projects. It develops wind energy and solar energy projects, as well as energy storage projects. The company was incorporated in 1981 and is headquartered in Rosh Haayin, Israel.

About Talen Energy

Talen Energy Corporation is a U.S.-based energy and power generation company. The Company owns or controls approximately 16,000 megawatts of capacity in wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. The Company generates and sells electricity, capacity and related products from power plants that use fuel sources, such as nuclear, natural gas and coal. The Company’s Susquehanna nuclear power plant has approximately two boiling water reactors with a combined capacity of over 2,600 megawatts. Its fossil fuel plants are located in Athens, Barney Davis, Bayonne, Brandon Shores, Brunner Island, Camden, Colstrip and Dartmouth, among others. It has an art energy trading center located in Allentown, Pennsylvania (PA), where it manages asset load obligations, fuel supply, capacity and related products, and all supporting physical or financial transactions for its electric generation portfolio.