Analyzing RWE (OTCMKTS:RWEOY) and Engie Brasl Ega (OTCMKTS:EGIEY)

Engie Brasl Ega (OTCMKTS:EGIEY) and RWE (OTCMKTS:RWEOY) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Analyst Recommendations

This is a summary of current recommendations for Engie Brasl Ega and RWE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Engie Brasl Ega	1	0	0	0	1.00
RWE	0	5	2	0	2.29

RWE has a consensus price target of $53.30, indicating a potential downside of 18.54%. Given RWE’s stronger consensus rating and higher possible upside, analysts clearly believe RWE is more favorable than Engie Brasl Ega.

Risk and Volatility

Engie Brasl Ega has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Dividends

Engie Brasl Ega pays an annual dividend of $0.18 per share and has a dividend yield of 3.0%. RWE pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. Engie Brasl Ega pays out 43.9% of its earnings in the form of a dividend. RWE pays out 26.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation and Earnings

This table compares Engie Brasl Ega and RWE”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Engie Brasl Ega	$2.30 billion	2.94	$462.59 million	$0.41	14.48
RWE	$19.94 billion	2.38	$3.54 billion	$3.79	17.26

RWE has higher revenue and earnings than Engie Brasl Ega. Engie Brasl Ega is trading at a lower price-to-earnings ratio than RWE, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Engie Brasl Ega and RWE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Engie Brasl Ega	19.40%	19.64%	4.88%
RWE	15.16%	4.77%	1.83%

Summary

RWE beats Engie Brasl Ega on 9 of the 14 factors compared between the two stocks.

About Engie Brasl Ega

Engie Brasil Energia S.A., together with its subsidiaries, generates, sells, and trades in electrical energy in Brazil. The company operates 76 plants, including 11 hydroelectric power plants; 1 thermal power plants; 50 wind farms; 3 biomass; 9 photovoltaic and solar power plant; and 2 small hydroelectric plants. As of December 31, 2022, it had an installed capacity of 8,453.3 megawatts. The company also transports natural gas through 4,500 km of gas pipelines. In addition, it manufactures, wholesales, retails, operates, and maintains solar panels. The company was formerly known as Tractebel Energia S.A. and changed its name to Engie Brasil Energia S.A. in July 2016. The company was founded in 2005 and is headquartered in Florianópolis, Brazil. Engie Brasil Energia S.A. operates as a subsidiary of ENGIE Brasil Participações Ltda.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.