Critical Survey: CENTRAIS ELETRI/S (NYSE:EBR) and PPL (NYSE:PPL)

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CENTRAIS ELETRI/S (NYSE:EBR) and PPL (NYSE:PPL) are both large-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Profitability

This table compares CENTRAIS ELETRI/S and PPL’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CENTRAIS ELETRI/S N/A 27.61% 7.83%
PPL 23.79% 14.52% 3.91%

Valuation & Earnings

This table compares CENTRAIS ELETRI/S and PPL’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CENTRAIS ELETRI/S $6.83 billion 2.11 $3.30 billion N/A N/A
PPL $7.79 billion 2.69 $1.83 billion $2.40 12.08

CENTRAIS ELETRI/S has higher earnings, but lower revenue than PPL.

Institutional & Insider Ownership

0.8% of CENTRAIS ELETRI/S shares are held by institutional investors. Comparatively, 72.9% of PPL shares are held by institutional investors. 0.3% of PPL shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

CENTRAIS ELETRI/S has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, PPL has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for CENTRAIS ELETRI/S and PPL, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CENTRAIS ELETRI/S 1 0 0 0 1.00
PPL 1 9 2 0 2.08

PPL has a consensus price target of $34.11, suggesting a potential upside of 17.71%. Given PPL’s stronger consensus rating and higher probable upside, analysts clearly believe PPL is more favorable than CENTRAIS ELETRI/S.

Dividends

CENTRAIS ELETRI/S pays an annual dividend of $0.19 per share and has a dividend yield of 1.8%. PPL pays an annual dividend of $1.65 per share and has a dividend yield of 5.7%. PPL pays out 68.8% of its earnings in the form of a dividend. PPL has increased its dividend for 7 consecutive years. PPL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

PPL beats CENTRAIS ELETRI/S on 10 of the 15 factors compared between the two stocks.

CENTRAIS ELETRI/S Company Profile

Centrais Elétricas Brasileiras S.A. – Eletrobras, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in Brazil. The company generates electricity through thermal, nuclear, wind, and hydroelectric plants. As of December 31, 2017, it owned and operated 44 hydroelectric plants and held interests in various other plants with a total installed capacity of 42,350 Megawatts (MW); 112 thermal plants, including coal, and oil and gas power generation units with an installed capacity of 2,646 MW; and 2 nuclear power plants with an installed capacity of 1,990 MW. The company also operates 71,684 kilometers of transmission lines and 6 power distributors that serve approximately 4.4 million consumers. Centrais Elétricas Brasileiras S.A. ? Eletrobrás was founded in 1962 and is based in Rio de Janeiro, Brazil.

PPL Company Profile

PPL Corporation, a utility holding company, delivers electricity and natural gas in the United States and the United Kingdom. The company operates through three segments: U.K. Regulated, Kentucky Regulated, and Pennsylvania Regulated. It serves approximately 414,000 electric and 328,000 natural gas customers in Louisville and adjacent areas in Kentucky; 527,000 electric customers in central, southeastern, and western Kentucky; and 28,000 electric customers in 5 counties in southwestern Virginia. The company also provides electric delivery services to approximately 1.4 million customers in Pennsylvania; operates electricity distribution networks in the United Kingdom; generates electricity from coal, gas, hydro, and solar sources in Kentucky; and sells wholesale electricity to 10 municipalities in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.

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