Financial Analysis: NRG Yield (NYLD) versus The Competition

NRG Yield (NYSE: NYLD) is one of 87 publicly-traded companies in the “Electric Utilities” industry, but how does it weigh in compared to its competitors? We will compare NRG Yield to related companies based on the strength of its risk, institutional ownership, dividends, valuation, profitability, analyst recommendations and earnings.

Dividends

NRG Yield pays an annual dividend of $1.12 per share and has a dividend yield of 5.7%. NRG Yield pays out 266.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Electric Utilities” companies pay a dividend yield of 3.2% and pay out 101.8% of their earnings in the form of a dividend.

Earnings and Valuation

This table compares NRG Yield and its competitors gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
NRG Yield $1.02 billion $67.00 million 46.55
NRG Yield Competitors $7.53 billion $821.25 million 47.03

NRG Yield’s competitors have higher revenue and earnings than NRG Yield. NRG Yield is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares NRG Yield and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NRG Yield 4.10% 1.76% 0.48%
NRG Yield Competitors -5.85% 7.79% 2.46%

Volatility & Risk

NRG Yield has a beta of 2.53, meaning that its stock price is 153% more volatile than the S&P 500. Comparatively, NRG Yield’s competitors have a beta of 0.64, meaning that their average stock price is 36% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for NRG Yield and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NRG Yield 0 6 3 0 2.33
NRG Yield Competitors 551 3093 2470 45 2.33

NRG Yield currently has a consensus target price of $19.57, indicating a potential upside of 0.11%. As a group, “Electric Utilities” companies have a potential upside of 6.94%. Given NRG Yield’s competitors higher probable upside, analysts plainly believe NRG Yield has less favorable growth aspects than its competitors.

Institutional and Insider Ownership

28.2% of NRG Yield shares are owned by institutional investors. Comparatively, 65.9% of shares of all “Electric Utilities” companies are owned by institutional investors. 0.2% of NRG Yield shares are owned by insiders. Comparatively, 2.6% of shares of all “Electric Utilities” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

NRG Yield competitors beat NRG Yield on 11 of the 15 factors compared.

About NRG Yield

NRG Yield, Inc. serves as the primary vehicle, through which NRG Energy, Inc. owns, operates and acquires contracted renewable and conventional generation and thermal infrastructure assets. It owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States. Its contracted generation portfolio includes three natural gas or dual-fired facilities, eight utility-scale solar and wind generation facilities and two portfolios of distributed solar facilities that collectively represent 1,324 net megawatt. The Company also own thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,098 net megawatt and electric generation capacity of 123 net megawatt. In July 2014, NRG Yield Inc completed its acquisition of three Right of First Offer (ROFO) assets from NRG Energy, Inc. In August 2014, it acquired Alta Wind facility located in Tehachapi, California from Terra-Gen Power LLC.

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