Contrasting RWE Aktiengesellschaft (OTCMKTS:RWEOY) and APA (NASDAQ:APA)

RWE Aktiengesellschaft (OTCMKTS:RWEOY) and APA (NASDAQ:APA) are both large-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Dividends

RWE Aktiengesellschaft pays an annual dividend of $0.75 per share and has a dividend yield of 2.1%. APA pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. RWE Aktiengesellschaft pays out 28.5% of its earnings in the form of a dividend. APA pays out 11.2% 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. APA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares RWE Aktiengesellschaft and APA’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RWE Aktiengesellschaft	$30.91 billion	0.76	$1.57 billion	$2.63	13.29
APA	$8.19 billion	1.32	$2.86 billion	$8.94	3.25

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

Analyst Ratings

This is a summary of current ratings and target prices for RWE Aktiengesellschaft and APA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RWE Aktiengesellschaft	0	1	0	0	2.00
APA	4	10	5	1	2.15

APA has a consensus price target of $40.52, indicating a potential upside of 39.40%. Given APA’s stronger consensus rating and higher probable upside, analysts clearly believe APA is more favorable than RWE Aktiengesellschaft.

Insider & Institutional Ownership

83.0% of APA shares are held by institutional investors. 1.3% of APA shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares RWE Aktiengesellschaft and APA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RWE Aktiengesellschaft	6.99%	10.69%	3.38%
APA	34.04%	45.32%	8.87%

Risk and Volatility

RWE Aktiengesellschaft has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, APA has a beta of 3.24, suggesting that its stock price is 224% more volatile than the S&P 500.

Summary

APA beats RWE Aktiengesellschaft on 15 of the 17 factors compared between the two stocks.

About RWE Aktiengesellschaft

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.

About APA

APA Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has oil and gas operations in the United States, Egypt, and North Sea. The company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally. APA Corporation was incorporated in 1954 and is headquartered in Houston, Texas.