Kenon (NYSE:KEN) and Pinnacle West Capital (NYSE:PNW) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Volatility & Risk

Kenon has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, Pinnacle West Capital has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Profitability

This table compares Kenon and Pinnacle West Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kenon N/A 41.51% 13.85%
Pinnacle West Capital 12.95% 9.12% 2.75%

Institutional & Insider Ownership

1.6% of Kenon shares are owned by institutional investors. Comparatively, 82.0% 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 large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Pinnacle West Capital pays an annual dividend of $2.78 per share and has a dividend yield of 3.4%. Kenon does not pay a dividend. Pinnacle West Capital pays out 63.9% of its earnings in the form of a dividend. Pinnacle West Capital has raised its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Kenon and Pinnacle West Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kenon $366.00 million 2.42 $236.59 million N/A N/A
Pinnacle West Capital $3.57 billion 2.56 $488.45 million $4.35 18.74

Pinnacle West Capital has higher revenue and earnings than Kenon.

Analyst Ratings

This is a summary of current ratings and recommmendations for Kenon and Pinnacle West Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kenon 0 0 0 0 N/A
Pinnacle West Capital 0 6 3 0 2.33

Pinnacle West Capital has a consensus price target of $83.63, indicating a potential upside of 2.61%. Given Pinnacle West Capital’s higher possible upside, analysts clearly believe Pinnacle West Capital is more favorable than Kenon.

Summary

Pinnacle West Capital beats Kenon on 10 of the 14 factors compared between the two stocks.

About Kenon

Kenon Holdings Ltd., through its subsidiaries, owns, develops, and operates power generation facilities in Israel. It operates through OPC, Qoros, and Other segments. The company's power generation plants operate on natural gas and diesel. It also designs, manufactures, sells, and services passenger vehicles, parts, and accessories through a network of independent authorized retail dealers in China. As of December 31, 2017, the company's Qoros' dealerships included 113 point of sales facilities. In addition, Kenon Holdings Ltd., through its 32% equity interest in ZIM Integrated Shipping Services, Ltd., owned and chartered vessels with a total container capacity of 385,974 TEUs. Further, it develops and owns a proprietary natural gas-to-liquid technology process. The company was incorporated in 2014 and is based in Singapore.

About Pinnacle West Capital

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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