Contrasting TransAlta (NYSE:TAC) & Spruce Power (NYSE:SPRU)

TransAlta (NYSE:TAC) and Spruce Power (NYSE:SPRU) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares TransAlta and Spruce Power’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransAlta	18.70%	45.47%	5.94%
Spruce Power	-61.34%	-7.07%	-1.83%

Volatility and Risk

TransAlta has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Spruce Power has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Earnings & Valuation

This table compares TransAlta and Spruce Power’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TransAlta	$2.49 billion	0.84	$514.86 million	$1.55	4.47
Spruce Power	$79.86 million	0.79	-$65.83 million	($2.68)	-1.29

TransAlta has higher revenue and earnings than Spruce Power. Spruce Power is trading at a lower price-to-earnings ratio than TransAlta, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for TransAlta and Spruce Power, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TransAlta	0	0	1	0	3.00
Spruce Power	0	0	0	0	N/A

Institutional & Insider Ownership

59.0% of TransAlta shares are owned by institutional investors. Comparatively, 20.8% of Spruce Power shares are owned by institutional investors. 13.1% of TransAlta shares are owned by company insiders. Comparatively, 9.5% of Spruce Power shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

TransAlta beats Spruce Power on 11 of the 12 factors compared between the two stocks.

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 Spruce Power

Spruce Power Holding Corporation owns and operates distributed solar energy assets in the United States. The company provides subscription-based services for homeowners and businesses to own and maintain rooftop solar and battery storage. It offers its subscription-based services to approximately 75,000 customers. The company is headquartered in Denver, Colorado.