Contrasting Nextera Energy Partners (NYSE:NEP) and Entergy (NYSE:ETR)

Nextera Energy Partners (NYSE:NEP) and Entergy (NYSE:ETR) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Risk & Volatility

Nextera Energy Partners has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Entergy has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Profitability

This table compares Nextera Energy Partners and Entergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nextera Energy Partners	-0.73%	1.34%	0.85%
Entergy	8.90%	10.68%	2.49%

Insider & Institutional Ownership

66.0% of Nextera Energy Partners shares are held by institutional investors. Comparatively, 88.1% of Entergy shares are held by institutional investors. 0.1% of Nextera Energy Partners shares are held by company insiders. Comparatively, 0.4% of Entergy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Nextera Energy Partners pays an annual dividend of $3.67 per share. Entergy pays an annual dividend of $2.40 per share and has a dividend yield of 2.9%. Nextera Energy Partners pays out -3,670.0% of its earnings in the form of a dividend. Entergy pays out 98.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares Nextera Energy Partners and Entergy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nextera Energy Partners	$1.23 billion	0.00	-$10.00 million	($0.10)	N/A
Entergy	$11.88 billion	2.99	$2.36 billion	$2.43	33.98

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

Analyst Ratings

This is a summary of current ratings and target prices for Nextera Energy Partners and Entergy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nextera Energy Partners	2	0	0	0	1.00
Entergy	0	5	9	1	2.73

Nextera Energy Partners presently has a consensus target price of $10.00, suggesting a potential upside of 0.00%. Entergy has a consensus target price of $85.25, suggesting a potential upside of 3.26%. Given Entergy’s stronger consensus rating and higher probable upside, analysts plainly believe Entergy is more favorable than Nextera Energy Partners.

Summary

Entergy beats Nextera Energy Partners on 14 of the 16 factors compared between the two stocks.

About Nextera Energy Partners

NextEra Energy Partners LP engages in the acquisition, management, and ownership of contracted clean energy projects with long-term cash flows. It owns interests in wind and solar projects in North America and natural gas infrastructure assets in Texas. The company was founded on March 6, 2014 and is headquartered in Juno Beach, FL.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and retail distribution of electricity in the United States. It generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, including the City of New Orleans; and distributes natural gas. It also engages in the ownership of interests in non-nuclear power plants that sell electric power to wholesale customers, as well as provides decommissioning services to other nuclear power plant owners. It generates electricity through gas, nuclear, coal, hydro, and solar power sources. The company sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company’s power plants have approximately 24,000 megawatts of electric generating capacity. It delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1913 and is headquartered in New Orleans, Louisiana.