Head to Head Analysis: Brookfield Renewable Partners (BEP) & Huaneng Power International (HNP)

Huaneng Power International (NYSE: HNP) and Brookfield Renewable Partners (NYSE:BEP) are both mid-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, analyst recommendations, institutional ownership, risk and valuation.

Profitability

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This table compares Huaneng Power International and Brookfield Renewable Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Huaneng Power International 1.22% 1.72% 0.46%
Brookfield Renewable Partners 1.85% 0.40% 0.18%

Analyst Recommendations

This is a summary of recent ratings and target prices for Huaneng Power International and Brookfield Renewable Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Huaneng Power International 1 1 3 0 2.40
Brookfield Renewable Partners 0 9 5 0 2.36

Brookfield Renewable Partners has a consensus target price of $36.28, suggesting a potential upside of 18.32%. Given Brookfield Renewable Partners’ higher possible upside, analysts plainly believe Brookfield Renewable Partners is more favorable than Huaneng Power International.

Volatility & Risk

Huaneng Power International has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Brookfield Renewable Partners has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500.

Valuation and Earnings

This table compares Huaneng Power International and Brookfield Renewable Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Huaneng Power International $22.56 billion 0.44 $233.81 million $3.23 8.04
Brookfield Renewable Partners $2.67 billion 2.07 -$4.00 million ($0.23) -133.30

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

Dividends

Huaneng Power International pays an annual dividend of $1.49 per share and has a dividend yield of 5.7%. Brookfield Renewable Partners pays an annual dividend of $1.96 per share and has a dividend yield of 6.4%. Huaneng Power International pays out 46.1% of its earnings in the form of a dividend. Brookfield Renewable Partners pays out -852.2% 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. Brookfield Renewable Partners has raised its dividend for 4 consecutive years. Brookfield Renewable Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

0.4% of Huaneng Power International shares are owned by institutional investors. Comparatively, 54.0% of Brookfield Renewable Partners shares are owned by institutional investors. 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.

Huaneng Power International Company Profile

Huaneng Power International, Inc., an independent power producer, generates and sells electricity and heat to the regional or provincial grid companies in the People's Republic of China and Singapore. It is involved in the development, construction, operation, and management of power plants and related projects; and generation, wholesale, and retail of power and other relating utilities. The company generates power from coal, wind, gas, oil, biomass, and hydro resources. It is also involved in the sale of coal ash and lime; loading warehousing and conveying services; port development and construction, coal mixture, and machinery leasing and repair services; installation of cold energy instrumentation; and thermal heating services. In addition, the company engages in the development of new energy distribution of coal and coal products; installation and maintenance of power equipment; water supply services; construction and operation of heating pipe networks; power supply, energy transmission, and substation project contracting; cargo transportation along domestic coastal areas; and port management, cargo loading, and water transport material supply. Further, it is involved in the real estate development, leasing, and agency services; production and sale of mineral water; and aquaculture and agriculture irrigation activities, as well as provides environment engineering, waste recycling consultancy, and industrial waste management and recycling services. As of March 31, 2017, the company had controlled generating capacity of 101,270 megawatts and a total generating capacity of 89,486 megawatts. Huaneng Power International, Inc. was founded in 1994 and is headquartered in Beijing, the People's Republic of China.

Brookfield Renewable Partners Company Profile

Brookfield Renewable Partners L.P. owns a portfolio of renewable power generating facilities in the North America, Colombia, Brazil, Europe, and internationally. The company operates through Hydroelectric; Wind; and Solar, Storage, and others segments. It operates 840 generation facilities using hydro, solar, wind, biomass, and other renewable technologies. Brookfield Renewable Partners Limited operates as the general partner of Brookfield Renewable Partners L.P. The company was formerly known as Brookfield Renewable Energy Partners L.P. and changed its name to Brookfield Renewable Partners L.P. in May 2016. The company was founded in 1999 and is based in Hamilton, Bermuda. Brookfield Renewable Partners L.P. is a subsidiary of Brookfield Renewable Partners Limited.

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