RED ELECTRICA C/ADR (OTCMKTS:RDEIY) versus Eversource Energy (OTCMKTS:ES) Critical Review

RED ELECTRICA C/ADR (OTCMKTS:RDEIY) and Eversource Energy (NYSE:ES) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for RED ELECTRICA C/ADR and Eversource Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RED ELECTRICA C/ADR 2 3 1 0 1.83
Eversource Energy 2 2 8 0 2.50

Eversource Energy has a consensus price target of $80.40, suggesting a potential downside of 6.01%. Given Eversource Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Eversource Energy is more favorable than RED ELECTRICA C/ADR.

Dividends

RED ELECTRICA C/ADR pays an annual dividend of $0.57 per share and has a dividend yield of 5.8%. Eversource Energy pays an annual dividend of $2.14 per share and has a dividend yield of 2.5%. Eversource Energy pays out 65.2% of its earnings in the form of a dividend. Eversource Energy has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

78.5% of Eversource Energy shares are held by institutional investors. 0.4% of Eversource Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares RED ELECTRICA C/ADR and Eversource Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RED ELECTRICA C/ADR $2.19 billion N/A N/A N/A N/A
Eversource Energy $8.45 billion 3.28 $1.03 billion $3.28 26.08

Eversource Energy has higher revenue and earnings than RED ELECTRICA C/ADR.

Profitability

This table compares RED ELECTRICA C/ADR and Eversource Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RED ELECTRICA C/ADR N/A N/A N/A
Eversource Energy 10.00% 9.24% 2.79%

Volatility and Risk

RED ELECTRICA C/ADR has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500.

Summary

Eversource Energy beats RED ELECTRICA C/ADR on 10 of the 13 factors compared between the two stocks.

About RED ELECTRICA C/ADR

Red Eléctrica Corporación, S.A. transmits electricity; operates and manages transmission network for the electricity system; and manages electricity transmission grid in Spain and internationally. Its transmission network comprises approximately 43,800 kilometers; and has 86,654 MVA of transformer capacity. The company also provides consultancy, engineering, and construction services; telecommunications infrastructure services to telecommunications operators comprising leasing of dark fiber; and line and sub-station maintenance services. Red Eléctrica Corporación, S.A. was founded in 1985 and is based in Alcobendas, Spain.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates in four segments: Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution. It is involved in the transmission and distribution of electricity; and distribution of natural gas. The company operates water regulated utilities. It also provides water services to approximately 228,000 customers. It serves residential, commercial, industrial, municipal, fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire, the United States. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was founded in 1927 and is based in Springfield, Massachusetts.

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