Cent PUERTO S AS (CEPU) & Pinnacle West Capital (PNW) Head to Head Review

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Cent PUERTO S AS (NYSE:CEPU) and Pinnacle West Capital (NYSE:PNW) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Dividends

Cent PUERTO S AS pays an annual dividend of $0.28 per share and has a dividend yield of 3.1%. Pinnacle West Capital pays an annual dividend of $2.78 per share and has a dividend yield of 3.3%. Cent PUERTO S AS pays out 19.9% of its earnings in the form of a dividend. Pinnacle West Capital pays out 63.9% 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. Pinnacle West Capital has raised its dividend for 6 consecutive years. Pinnacle West Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Cent PUERTO S AS and Pinnacle West Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cent PUERTO S AS N/A N/A N/A
Pinnacle West Capital 12.95% 9.12% 2.75%

Valuation & Earnings

This table compares Cent PUERTO S AS and Pinnacle West Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cent PUERTO S AS $361.03 million 3.80 $211.87 million $1.41 6.42
Pinnacle West Capital $3.57 billion 2.63 $488.45 million $4.35 19.24

Pinnacle West Capital has higher revenue and earnings than Cent PUERTO S AS. Cent PUERTO S AS is trading at a lower price-to-earnings ratio than Pinnacle West Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cent PUERTO S AS and Pinnacle West Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cent PUERTO S AS 0 0 3 0 3.00
Pinnacle West Capital 0 7 4 0 2.36

Cent PUERTO S AS currently has a consensus target price of $20.00, indicating a potential upside of 120.99%. Pinnacle West Capital has a consensus target price of $84.00, indicating a potential upside of 0.38%. Given Cent PUERTO S AS’s stronger consensus rating and higher possible upside, analysts clearly believe Cent PUERTO S AS is more favorable than Pinnacle West Capital.

Institutional and Insider Ownership

5.4% of Cent PUERTO S AS shares are owned by institutional investors. Comparatively, 82.3% of Pinnacle West Capital shares are owned by institutional investors. 0.5% of Pinnacle West Capital shares are owned 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.

Summary

Pinnacle West Capital beats Cent PUERTO S AS on 12 of the 16 factors compared between the two stocks.

Cent PUERTO S AS Company Profile

Central Puerto S.A. generates and sells electric power to private and public customers in Argentina. As of December 31, 2017, the company owned and operated five thermal generation plants and one hydroelectric generation plant with an installed capacity of 3,663 MW. It also produces steam. The company was founded in 1989 and is based in Buenos Aires, Argentina.

Pinnacle West Capital Company Profile

Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. It generates, transmits, and distributes electricity using coal, nuclear, gas, oil, and solar resources. The company serves approximately 1.2 million homes and businesses. It owns or leases approximately 6,236 megawatts of regulated generation capacity. The company was founded in 1920 and is headquartered in Phoenix, Arizona.

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