Contrasting Atlantica Yield (AY) and Dominion Energy (D)

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Atlantica Yield (NASDAQ:AY) and Dominion Energy (NYSE:D) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Insider & Institutional Ownership

49.3% of Atlantica Yield shares are held by institutional investors. Comparatively, 67.4% of Dominion Energy shares are held by institutional investors. 0.4% of Dominion Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Atlantica Yield and Dominion Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantica Yield $1.01 billion 2.00 -$111.80 million ($0.18) -112.06
Dominion Energy $12.59 billion 3.82 $3.00 billion $3.60 20.42

Dominion Energy has higher revenue and earnings than Atlantica Yield. Atlantica Yield is trading at a lower price-to-earnings ratio than Dominion Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Atlantica Yield and Dominion Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantica Yield -5.50% 1.95% 0.36%
Dominion Energy 23.69% 13.13% 3.33%

Analyst Ratings

This is a breakdown of current recommendations for Atlantica Yield and Dominion Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantica Yield 0 0 5 0 3.00
Dominion Energy 0 8 5 0 2.38

Atlantica Yield currently has a consensus price target of $25.75, suggesting a potential upside of 27.66%. Dominion Energy has a consensus price target of $85.70, suggesting a potential upside of 16.60%. Given Atlantica Yield’s stronger consensus rating and higher possible upside, research analysts clearly believe Atlantica Yield is more favorable than Dominion Energy.

Dividends

Atlantica Yield pays an annual dividend of $1.36 per share and has a dividend yield of 6.7%. Dominion Energy pays an annual dividend of $3.34 per share and has a dividend yield of 4.5%. Atlantica Yield pays out -755.6% of its earnings in the form of a dividend. Dominion Energy pays out 92.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dominion Energy has raised its dividend for 9 consecutive years. Atlantica Yield is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Atlantica Yield has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Dominion Energy has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500.

Summary

Dominion Energy beats Atlantica Yield on 11 of the 16 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 Dominion Energy

Dominion Energy, Inc. produces and transports energy in the United States. The company's Power Delivery segment engages in the regulated electric transmission and distribution operations that serve residential, commercial, industrial, and governmental customers in Virginia and North Carolina. Its Power Generation segment is involved in the electricity generation activities through gas, coal, nuclear, oil, renewables, biomass, hydro, solar, and power purchase agreements; and related energy supply operations. It also comprises generation operations of the company's merchant fleet and energy marketing, and price risk management activities for its assets. The company's Gas Infrastructure segment engages in the regulated natural gas distribution, gas transmission pipeline and storage, liquefied natural gas, and nonregulated retail natural gas marketing operations, as well as natural gas gathering and processing activities. This segment serves residential, commercial, and industrial customers. As of December 31, 2017, the company's portfolio of assets included approximately 26,000 megawatts of generating capacity; 6,600 miles of electric transmission lines; 57,900 miles of electric distribution lines; 14,800 miles of natural gas transmission, gathering, and storage pipelines; and 51,800 miles of gas distribution pipelines. It served approximately 6 million utility and retail energy customers; and operated underground natural gas storage systems with approximately 1 trillion cubic feet of storage capacity. In addition, Dominion Energy, Inc. sells electricity at wholesale prices to rural electric cooperatives, municipalities, and into wholesale electricity markets. The company was formerly known as Dominion Resources, Inc. and changed its name to Dominion Energy, Inc. in May 2017. Dominion Energy, Inc. was founded in 1909 and is headquartered in Richmond, Virginia.

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