Head-To-Head Analysis: Engie Brasil Energia (OTCMKTS:EGIEY) & Southern (NYSE:SO)

Engie Brasil Energia (OTCMKTS:EGIEY) and Southern (NYSE:SO) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Profitability

This table compares Engie Brasil Energia and Southern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Engie Brasil Energia	41.21%	31.69%	7.86%
Southern	17.67%	12.88%	3.27%

Institutional and Insider Ownership

64.1% of Southern shares are held by institutional investors. 0.2% of Southern shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Engie Brasil Energia and Southern, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Engie Brasil Energia	0	0	0	0	N/A
Southern	1	8	7	0	2.38

Southern has a consensus target price of $88.27, indicating a potential downside of 0.00%. Given Southern’s higher possible upside, analysts clearly believe Southern is more favorable than Engie Brasil Energia.

Volatility and Risk

Engie Brasil Energia has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Southern has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Dividends

Engie Brasil Energia pays an annual dividend of $0.20 per share and has a dividend yield of 2.7%. Southern pays an annual dividend of $2.88 per share and has a dividend yield of 3.3%. Engie Brasil Energia pays out 19.0% of its earnings in the form of a dividend. Southern pays out 74.4% 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. Southern has increased its dividend for 24 consecutive years. Southern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Engie Brasil Energia and Southern”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Engie Brasil Energia	$2.15 billion	2.79	$686.94 million	$1.05	7.01
Southern	$25.25 billion	3.82	$3.98 billion	$3.87	22.81

Southern has higher revenue and earnings than Engie Brasil Energia. Engie Brasil Energia is trading at a lower price-to-earnings ratio than Southern, indicating that it is currently the more affordable of the two stocks.

Summary

Southern beats Engie Brasil Energia on 11 of the 16 factors compared between the two stocks.

About Engie Brasil Energia

Engie Brasil Energia S.A., together with its subsidiaries, generates, sells, and trades in electrical energy in Brazil. The company operates 76 plants, including 11 hydroelectric power plants; 1 thermal power plants; 50 wind farms; 3 biomass; 9 photovoltaic and solar power plant; and 2 small hydroelectric plants. As of December 31, 2022, it had an installed capacity of 8,453.3 megawatts. The company also transports natural gas through 4,500 km of gas pipelines. In addition, it manufactures, wholesales, retails, operates, and maintains solar panels. The company was formerly known as Tractebel Energia S.A. and changed its name to Engie Brasil Energia S.A. in July 2016. The company was founded in 2005 and is headquartered in Florianópolis, Brazil. Engie Brasil Energia S.A. operates as a subsidiary of ENGIE Brasil Participações Ltda.

About Southern

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations. In addition, it owns and operates nuclear, coal, hydro, cogeneration, solar, wind, battery storage, and fuel cell facilities. Further, the constructs, operates, and maintains approximately 77,900 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.9 million electric and gas utility customers. Further, it develops distributed energy and resilience solutions; deploys microgrids for commercial, industrial, governmental, and utility customers; and offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.