Analyzing Hallador Energy (NASDAQ:HNRG) and CenterPoint Energy (NYSE:CNP)

CenterPoint Energy (NYSE:CNP) and Hallador Energy (NASDAQ:HNRG) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Volatility & Risk

CenterPoint Energy has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Hallador Energy has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500.

Profitability

This table compares CenterPoint Energy and Hallador Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CenterPoint Energy	11.79%	10.02%	2.48%
Hallador Energy	-4.85%	-6.71%	-3.39%

Dividends

CenterPoint Energy pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. Hallador Energy pays an annual dividend of $0.16 per share and has a dividend yield of 1.1%. CenterPoint Energy pays out 55.3% of its earnings in the form of a dividend. Hallador Energy pays out -2.8% 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CenterPoint Energy and Hallador Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CenterPoint Energy	1	8	5	0	2.29
Hallador Energy	0	0	2	0	3.00

CenterPoint Energy currently has a consensus price target of $34.46, suggesting a potential downside of 7.22%. Hallador Energy has a consensus price target of $16.00, suggesting a potential upside of 11.34%. Given Hallador Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Hallador Energy is more favorable than CenterPoint Energy.

Insider & Institutional Ownership

91.8% of CenterPoint Energy shares are owned by institutional investors. Comparatively, 61.4% of Hallador Energy shares are owned by institutional investors. 0.1% of CenterPoint Energy shares are owned by company insiders. Comparatively, 32.3% of Hallador Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares CenterPoint Energy and Hallador Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CenterPoint Energy	$8.64 billion	2.80	$917.00 million	$1.59	23.36
Hallador Energy	$404.39 million	1.51	$44.79 million	($5.73)	-2.51

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

Summary

CenterPoint Energy beats Hallador Energy on 12 of the 16 factors compared between the two stocks.

About CenterPoint Energy

CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company operates through two segments, Electric and Natural Gas. The Electric segment includes electric transmission and distribution services to electric customers and electric generation assets, as well as optimizes assets in the wholesale power market. The Natural Gas segment engages in the intrastate natural gas sales, and natural gas transportation and distribution for residential, commercial, industrial and institutional customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas; permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies; and provides maintenance and repair services of home appliances to customers in Minnesota and home repair protection plans to natural gas customers in Indiana, Mississippi, Ohio, and Texas through a third party. It serves approximately 2,534,730 metered customers; owned 348 substations with transformer capacity of 79,719 megavolt amperes; and owned and operated 217 miles of intrastate pipeline in Louisiana and Texas. The company was founded in 1866 and is headquartered in Houston, Texas.

About Hallador Energy

Hallador Energy Company, through its subsidiaries, engages in the production of steam coal in the State of Indiana for the electric power generation industry. The company owns the Oaktown Mine 1 and Oaktown Mine 2 underground mines in Oaktown; Freelandville Center Pit surface mine in Freelandville; and Prosperity Surface mine in Petersburg, Indiana. It is also involved in gas exploration activities in Indiana; and operation of logistics transport facility. Hallador Energy Company was founded in 1949 and is headquartered in Terre Haute, Indiana.