Comparing NextEra Energy Partners (NYSE:NEP) and FirstEnergy (NYSE:FE)

NextEra Energy Partners (NYSE:NEP) and FirstEnergy (NYSE:FE) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Dividends

NextEra Energy Partners pays an annual dividend of $3.57 per share and has a dividend yield of 13.8%. FirstEnergy pays an annual dividend of $1.70 per share and has a dividend yield of 4.2%. NextEra Energy Partners pays out 117.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FirstEnergy pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

NextEra Energy Partners has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, FirstEnergy has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for NextEra Energy Partners and FirstEnergy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NextEra Energy Partners	2	12	3	0	2.06
FirstEnergy	1	5	4	0	2.30

NextEra Energy Partners currently has a consensus target price of $36.93, suggesting a potential upside of 41.94%. FirstEnergy has a consensus target price of $40.55, suggesting a potential upside of 0.36%. Given NextEra Energy Partners’ higher probable upside, equities analysts plainly believe NextEra Energy Partners is more favorable than FirstEnergy.

Insider and Institutional Ownership

66.0% of NextEra Energy Partners shares are owned by institutional investors. Comparatively, 89.4% of FirstEnergy shares are owned by institutional investors. 0.1% of NextEra Energy Partners shares are owned by insiders. Comparatively, 0.1% of FirstEnergy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NextEra Energy Partners	23.55%	-0.48%	-0.30%
FirstEnergy	8.22%	12.45%	2.97%

Valuation and Earnings

This table compares NextEra Energy Partners and FirstEnergy’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	$1.08 billion	2.25	$200.00 million	$3.05	8.50
FirstEnergy	$12.87 billion	1.81	$1.10 billion	$1.74	23.26

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

Summary

FirstEnergy beats NextEra Energy Partners on 9 of the 16 factors compared between the two stocks.

About NextEra Energy Partners

NextEra Energy Partners, LP acquires, owns, and manages contracted clean energy projects in the United States. It owns a portfolio of contracted renewable generation assets consisting of wind, solar, and battery storage projects. The company owns contracted natural gas pipeline assets. NextEra Energy Partners, LP was incorporated in 2014 and is based in Juno Beach, Florida.

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.