Critical Analysis: OGE Energy (OGE) & Azure Power Global (AZRE)
OGE Energy (NYSE:OGE) and Azure Power Global (NYSE:AZRE) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Volatility and Risk
OGE Energy has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Azure Power Global has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500.
69.2% of OGE Energy shares are owned by institutional investors. Comparatively, 51.8% of Azure Power Global shares are owned by institutional investors. 0.5% of OGE Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares OGE Energy and Azure Power Global’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Azure Power Global||0.24%||0.81%||0.15%|
OGE Energy pays an annual dividend of $1.46 per share and has a dividend yield of 3.5%. Azure Power Global does not pay a dividend. OGE Energy pays out 68.9% of its earnings in the form of a dividend. OGE Energy has raised its dividend for 12 consecutive years.
Earnings and Valuation
This table compares OGE Energy and Azure Power Global’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OGE Energy||$2.27 billion||3.65||$425.50 million||$2.12||19.54|
|Azure Power Global||$118.27 million||3.96||-$12.60 million||($0.65)||-17.63|
OGE Energy has higher revenue and earnings than Azure Power Global. Azure Power Global is trading at a lower price-to-earnings ratio than OGE Energy, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and price targets for OGE Energy and Azure Power Global, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Azure Power Global||0||1||4||0||2.80|
OGE Energy presently has a consensus price target of $37.50, suggesting a potential downside of 9.49%. Azure Power Global has a consensus price target of $22.00, suggesting a potential upside of 91.97%. Given Azure Power Global’s stronger consensus rating and higher possible upside, analysts plainly believe Azure Power Global is more favorable than OGE Energy.
OGE Energy beats Azure Power Global on 11 of the 17 factors compared between the two stocks.
About OGE Energy
OGE Energy Corp., together with its subsidiaries, operates as an energy and energy services provider that provides physical delivery and related services for electricity and natural gas primarily in the south central United States. It operates in two segments, Electric Utility and Natural Gas Midstream Operations. The Electric Utility segment generates, transmits, distributes, and sells electric energy. This segment furnishes retail electric service in 267 communities and their contiguous rural and suburban areas; and owns and operates coal-fired, natural gas-fired, wind-powered, and solar-powered generating assets. Its service area covers 30,000 square miles in Oklahoma and western Arkansas, including Oklahoma City in Oklahoma; and Fort Smith, Arkansas. The Natural Gas Midstream Operations segment engages in gathering, processing, transporting, and storing natural gas; and the provision of crude oil gathering services, and interstate and intrastate natural gas pipeline transportation and storage services primarily to its producer, power plant, local distribution company, and industrial end-user customers. As of December 31, 2018, the company owned and operated interconnected electric generation, transmission, and distribution systems, including 11 generating stations with an aggregate capability of 6,616 megawatts; and transmission systems comprising 52 substations and 5,100 structure miles of lines in Oklahoma, and 7 substations and 277 structure miles of lines in Arkansas. Its distribution systems include 345 substations; 29,345 structure miles of overhead lines; 2,940 miles of underground conduit; and 10,932 miles of underground conductors in Oklahoma, as well as 30 substations, 2,786 structure miles of overhead lines, 297 miles of underground conduit, and 685 miles of underground conductors in Arkansas. The company was founded in 1902 and is headquartered in Oklahoma City, Oklahoma.
About Azure Power Global
Azure Power Global Limited, together with its subsidiaries, engages in the development, construction, ownership, operation, maintenance, and management of solar power plants in India. It generates solar energy based on long-term contracts with Indian government energy distribution companies, as well as other non-governmental energy distribution companies and commercial customers. As of March 31, 2018, the company had a portfolio capacity of approximately 1,871 megawatts. Azure Power Global Limited was founded in 2007 and is based in New Delhi, India.
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