AGL Energy (OTCMKTS:AGLNF) versus Kenon (NYSE:KEN) Critical Comparison

AGL Energy (OTCMKTS:AGLNF) and Kenon (NYSE:KEN) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares AGL Energy and Kenon’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGL Energy	N/A	N/A	N/A	$1.02	6.90
Kenon	$718.80 million	1.84	-$235.98 million	($4.13)	-5.94

AGL Energy has higher earnings, but lower revenue than Kenon. Kenon is trading at a lower price-to-earnings ratio than AGL Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for AGL Energy and Kenon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGL Energy	0	0	0	0	N/A
Kenon	0	0	0	0	N/A

Dividends

AGL Energy pays an annual dividend of $0.60 per share and has a dividend yield of 8.6%. Kenon pays an annual dividend of $3.80 per share and has a dividend yield of 15.5%. AGL Energy pays out 59.2% of its earnings in the form of a dividend. Kenon pays out -92.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kenon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares AGL Energy and Kenon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGL Energy	N/A	N/A	N/A
Kenon	-30.60%	-10.64%	-5.44%

Insider and Institutional Ownership

15.3% of AGL Energy shares are owned by institutional investors. Comparatively, 13.4% of Kenon shares are owned by institutional investors. 0.1% of Kenon shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

AGL Energy beats Kenon on 6 of the 10 factors compared between the two stocks.

About AGL Energy

AGL Energy Limited supplies energy and other essential services to residential, small and large businesses, and wholesale customers in Australia. It operates through three segments: Customer Markets, Integrated Energy, and Investments. The company engages in retailing of electricity, gas, broadband, mobile, voice, solar, and energy products and services; and operates power generation portfolio and other assets including coal, gas and renewable generation, natural gas storage and production, and development projects. It also offers renewable energy schemes; and controls dispatch of owned and contracted generation assets, gas offtake agreements, and associated portfolio of energy hedging products. In addition, the company offers coal and gas-fired generation; and renewable energy sources, such as wind, hydro and solar, batteries and other firming technology; and gas production and storage assets. AGL Energy Limited was founded in 1837 and is based in Sydney, Australia.

About Kenon

Kenon Holdings Ltd., through its subsidiaries, operates as an owner, developer, and operator of power generation facilities in Israel, the United States, and internationally. It operates through OPC Power Plants, CPV Group, and ZIM segments. The company engages in the generation and supply of electricity and energy; development, construction, and management of solar and wind energy, and conventional natural gas-fired power plants; and provision of container liner shipping services. It also operates a fleet of 150 vessels. Kenon Holdings Ltd. was incorporated in 2014 and is based in Singapore. Kenon Holdings Ltd. operates as a subsidiary of Ansonia Holdings Singapore B.V.