Financial Review: Xcel Energy (XEL) and Calpine (CPN)

Calpine (NYSE: CPN) and Xcel Energy (NYSE:XEL) are both companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Profitability

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This table compares Calpine and Xcel Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Calpine -3.87% -12.34% -2.25%
Xcel Energy 10.06% 10.44% 2.80%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Calpine and Xcel Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Calpine 0 7 2 0 2.22
Xcel Energy 0 6 5 0 2.45

Calpine presently has a consensus price target of $14.47, suggesting a potential downside of 5.12%. Xcel Energy has a consensus price target of $47.45, suggesting a potential upside of 7.80%. Given Xcel Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Xcel Energy is more favorable than Calpine.

Dividends

Xcel Energy pays an annual dividend of $1.52 per share and has a dividend yield of 3.5%. Calpine does not pay a dividend. Xcel Energy has increased its dividend for 14 consecutive years.

Institutional & Insider Ownership

78.4% of Calpine shares are owned by institutional investors. Comparatively, 74.0% of Xcel Energy shares are owned by institutional investors. 1.2% of Calpine shares are owned by company insiders. Comparatively, 0.2% of Xcel Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Calpine and Xcel Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Calpine $8.75 billion 0.63 -$339.00 million N/A N/A
Xcel Energy $11.40 billion 1.96 $1.15 billion N/A N/A

Xcel Energy has higher revenue and earnings than Calpine.

Summary

Xcel Energy beats Calpine on 11 of the 13 factors compared between the two stocks.

Calpine Company Profile

Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. As of December 31, 2016, the Company’s portfolio consisted of two types of power generation technologies, including natural gas-fired combustion turbines, such as combined-cycle plants, and renewable geothermal conventional steam turbines. As of December 31, 2016, the Company’s portfolio included 80 power plants, including one under construction, with an aggregate generation capacity of 25,908 Megawatt (MW) and 828 MW under construction. As of December 31, 2016, it had four MW of capacity from solar power generation technology at its Vineland Solar Energy Center in New Jersey.

Xcel Energy Company Profile

Xcel Energy Inc. is a public utility holding company. The Company’s operations include the activity of four utility subsidiaries that serve electric and natural gas customers in eight states. The Company’s segments include regulated electric utility, regulated natural gas utility and all other. The Company’s utility subsidiaries include NSP-Minnesota, NSP-Wisconsin, Public Service Company of Colorado (PSCo) and Southwestern Public Service Co. (SPS), which serve customers in portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Along with WYCO Development LLC (WYCO), a joint venture formed with Colorado Interstate Gas Company, LLC (CIG) to develop and lease natural gas pipelines storage and compression facilities, and WestGas InterState, Inc. (WGI), an interstate natural gas pipeline company, these companies comprise the regulated utility operations.

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