Head-To-Head Contrast: TransAlta (NYSE:TAC) vs. Talen Energy (OTCMKTS:TLNE)

TransAlta (NYSE:TAC) and Talen Energy (OTCMKTS:TLNE) are both mid-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

59.0% of TransAlta shares are owned by institutional investors. Comparatively, 0.4% of Talen Energy shares are owned by institutional investors. 13.1% of TransAlta shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares TransAlta and Talen Energy’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TransAlta	$2.49 billion	1.04	$514.86 million	$1.55	5.60
Talen Energy	$2.55 billion	2.89	$613.00 million	N/A	N/A

Talen Energy has higher revenue and earnings than TransAlta.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TransAlta	0	0	1	0	3.00
Talen Energy	0	0	3	0	3.00

Talen Energy has a consensus target price of $101.00, indicating a potential downside of 19.21%. Given Talen Energy’s higher probable upside, analysts clearly believe Talen Energy is more favorable than TransAlta.

Profitability

This table compares TransAlta and Talen Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransAlta	18.41%	47.71%	5.92%
Talen Energy	N/A	1.87%	0.67%

About TransAlta

TransAlta Corporation engages in the development, production, and sale of electric energy. It operates through Hydro, Wind and Solar, Gas, Energy Transition, and Energy Marketing segments. The Hydro segment holds interest of approximately 922 megawatts (MW) of owned hydroelectric generating capacity located in Alberta, British Columbia, and Ontario. The Wind and Solar segment has a net ownership interest of approximately 2,057 MW of owned wind and solar electrical-generating capacity, as well as battery storage facilities located in Alberta, Ontario, New Brunswick, and Québec in Canada; the states of Massachusetts, Minnesota, New Hampshire, North Carolina, Pennsylvania, Washington, and Wyoming in the United States; and the state of Western Australia. The Gas segment has a net ownership interest of approximately 2,775 MW of owned gas electrical-generating capacity, and facilities located in Alberta, Ontario, Michigan, and the state of Western Australia. The Energy Transition segment has a net ownership interest of approximately 671 MW of owned coal electrical-generating capacity, as well as operates the Skookumchuck hydro facility in Centralia; and engages in the highvale mine and the mine reclamation activities. The Energy Marketing segment is involved in the trading of power, natural gas, and environmental products. It serves customers in various industry segments, including commercial real estate, municipal, manufacturing, industrial, hospitality, finance, and oil and gas. TransAlta Corporation was founded in 1909 and is headquartered in Calgary, Canada.

About Talen Energy

Talen Energy Corporation, an independent power producer and infrastructure company, produces and sells electricity, capacity, and ancillary services into wholesale power markets in the United States. The company operates nuclear, fossil, solar, and coal power plants. It is also developing battery storage projects. The company owns and operates approximately 10.7 GW of power infrastructure. Talen Energy Corporation is headquartered in Houston, Texas.