Avangrid (NYSE:AGR) & Terna (OTCMKTS:TERRF) Head to Head Analysis

Terna (OTCMKTS:TERRF) and Avangrid (NYSE:AGR) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Dividends

Terna pays an annual dividend of $0.16 per share and has a dividend yield of 2.1%. Avangrid pays an annual dividend of $1.76 per share and has a dividend yield of 4.8%. Terna pays out 61.8% of its earnings in the form of a dividend. Avangrid pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Terna and Avangrid’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Terna	N/A	N/A	N/A
Avangrid	10.80%	4.35%	2.07%

Earnings and Valuation

This table compares Terna and Avangrid’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terna	N/A	N/A	N/A	$0.26	29.45
Avangrid	$8.31 billion	1.69	$786.00 million	$2.31	15.75

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Terna and Avangrid, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terna	0	1	0	0	2.00
Avangrid	1	3	0	0	1.75

Avangrid has a consensus target price of $34.75, indicating a potential downside of 4.48%. Given Avangrid’s higher possible upside, analysts clearly believe Avangrid is more favorable than Terna.

Insider & Institutional Ownership

20.2% of Terna shares are owned by institutional investors. Comparatively, 13.1% of Avangrid shares are owned by institutional investors. 0.1% of Avangrid shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Avangrid beats Terna on 8 of the 12 factors compared between the two stocks.

About Terna

Terna S.p.A., together with its subsidiaries, engages in the electricity transmission and dispatching activities in Italy, Euro-area countries, and internationally. The company operates through Regulated, Non-Regulated, and International segments. It is involved in the planning, development, management, operation, and maintenance of national transmission grid; dispatching and metering; and construction of storage systems. The company also offers connectivity services, energy solutions, telecommunications systems and equipment, and operation and maintenance services. In addition, it designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids, industrial transformers for the steel and metals industries, and special transformers for convertors used in electrochemical production; designs, produces, and supplies marine and terrestrial cables; implements and develops renewable energy projects; and undertakes private interconnector projects. The company was founded in 1999 and is headquartered in Rome, Italy.

About Avangrid

Avangrid, Inc., an energy services holding company, engages in the regulated energy transmission and distribution, and renewable energy generation businesses in the United States. The company operates through Networks and Renewables segments. It is involved in the generation, transmission, and distribution of electricity; and distribution, transportation, and sale of natural gas. In addition, the company operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. Further, it delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities, as well as generates and provides power and other services to federal and state agencies, institutional retail, and joint action agencies. Additionally, the company delivers thermal output to wholesale customers in the Western United States. It owns eight electric and natural gas utilities, serving 3.3 million customers in New York and New England, as well as owns and operates 9.3 gigawatts of electricity capacity primarily through wind power in 22 states. Avangrid, Inc. was incorporated in 1997 and is headquartered in Orange, Connecticut. The company operates as a subsidiary of Iberdrola, S.A.