Talen Energy (NASDAQ:TLN – Get Free Report) and NRG Energy (NYSE:NRG – Get Free Report) are both large-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.
Insider & Institutional Ownership
0.4% of Talen Energy shares are held by institutional investors. Comparatively, 97.7% of NRG Energy shares are held by institutional investors. 0.2% of Talen Energy shares are held by company insiders. Comparatively, 0.9% of NRG Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Volatility and Risk
Talen Energy has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, NRG Energy has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Talen Energy | 0 | 0 | 11 | 0 | 3.00 |
| NRG Energy | 0 | 2 | 5 | 0 | 2.71 |
Talen Energy currently has a consensus target price of $247.10, suggesting a potential upside of 14.48%. NRG Energy has a consensus target price of $113.71, suggesting a potential upside of 9.99%. Given Talen Energy’s stronger consensus rating and higher possible upside, equities analysts plainly believe Talen Energy is more favorable than NRG Energy.
Profitability
This table compares Talen Energy and NRG Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Talen Energy | 50.48% | 8.59% | 3.13% |
| NRG Energy | 3.43% | 48.96% | 4.73% |
Earnings and Valuation
This table compares Talen Energy and NRG Energy”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Talen Energy | $2.55 billion | 4.30 | $613.00 million | $18.68 | 11.56 |
| NRG Energy | $28.82 billion | 0.73 | -$202.00 million | $3.98 | 25.98 |
Talen Energy has higher earnings, but lower revenue than NRG Energy. Talen Energy is trading at a lower price-to-earnings ratio than NRG Energy, indicating that it is currently the more affordable of the two stocks.
Summary
Talen Energy beats NRG Energy on 8 of the 14 factors compared between the two stocks.
About Talen Energy
Talen Energy Corporation is a U.S.-based energy and power generation company. The Company owns or controls approximately 16,000 megawatts of capacity in wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. The Company generates and sells electricity, capacity and related products from power plants that use fuel sources, such as nuclear, natural gas and coal. The Company’s Susquehanna nuclear power plant has approximately two boiling water reactors with a combined capacity of over 2,600 megawatts. Its fossil fuel plants are located in Athens, Barney Davis, Bayonne, Brandon Shores, Brunner Island, Camden, Colstrip and Dartmouth, among others. It has an art energy trading center located in Allentown, Pennsylvania (PA), where it manages asset load obligations, fuel supply, capacity and related products, and all supporting physical or financial transactions for its electric generation portfolio.
About NRG Energy
NRG Energy, Inc., together with its subsidiaries, operates as an energy and home services company in the United States and Canada. It operates through Texas; East; West/Services/Other; Vivint Smart Home; and Corporate Activities segments. The company produces and sells electricity generated using coal, oil, solar, and battery storage; natural gas; and a cloud-based home platform, including hardware, software, sales, installation, customer service, technical support, and professional monitoring solutions. It offers retail electricity and energy management, line and surge protection products, HVAC installation, repair and maintenance, home protection products, carbon offsets, back-up power stations, portable power, portable solar, and portable lighting; retail services comprising demand response, commodity sales, energy efficiency, and energy management solutions; and system power, distributed generation, renewable and low-carbon products, carbon management and specialty services, backup generation, storage and distributed solar, and energy advisory services. In addition, the company trades in power, natural gas, and related commodities; environmental products; weather products; and financial products, including forwards, futures, options, and swaps. It offers its products and services under the NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint. It serves residential, commercial, government, industrial, and wholesale customers. NRG Energy, Inc. was founded in 1989 and is headquartered in Houston, Texas.
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