Contrasting Algonquin Power & Utilities (NYSE:AQN) and Spruce Power (NYSE:SPRU)

Algonquin Power & Utilities (NYSE:AQN) and Spruce Power (NYSE:SPRU) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Algonquin Power & Utilities	4.70%	5.36%	1.93%
Spruce Power	-76.20%	-10.61%	-2.61%

Volatility and Risk

Algonquin Power & Utilities has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Spruce Power has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Valuation and Earnings

This table compares Algonquin Power & Utilities and Spruce Power’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Algonquin Power & Utilities	$2.70 billion	1.51	$28.67 million	($0.49)	-10.82
Spruce Power	$79.86 million	0.65	-$65.83 million	($2.68)	-1.05

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

Institutional & Insider Ownership

62.3% of Algonquin Power & Utilities shares are held by institutional investors. Comparatively, 20.8% of Spruce Power shares are held by institutional investors. 0.1% of Algonquin Power & Utilities shares are held by insiders. Comparatively, 9.6% of Spruce Power 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 Ratings

This is a breakdown of current recommendations for Algonquin Power & Utilities and Spruce Power, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algonquin Power & Utilities	0	9	1	1	2.27
Spruce Power	0	0	0	0	N/A

Algonquin Power & Utilities currently has a consensus target price of $6.33, indicating a potential upside of 19.34%. Given Algonquin Power & Utilities’ higher probable upside, analysts plainly believe Algonquin Power & Utilities is more favorable than Spruce Power.

Summary

Algonquin Power & Utilities beats Spruce Power on 11 of the 14 factors compared between the two stocks.

About Algonquin Power & Utilities

Algonquin Power & Utilities Corp. operates in the power and utility industries in the United States, Canada, and other regions. The company operates in two segments, Regulated Services Group and Renewable Energy Group. The company primarily owns and operates a regulated electric, water distribution and wastewater collection, and natural gas utility systems and transmission operations. As of December 31, 2023, it provided distribution services to approximately 1,256,000 customer connections in the electric (approximately 309,000 customer connections), water and wastewater (approximately 572,000 customer connections), and natural gas sectors (approximately 375,000 customer connections). The company's electrical distribution utility systems and related transmission and generation assets are located in the states of Arkansas, California, Kansas, Missouri, Nevada, New Hampshire, and Oklahoma, and in Bermuda. Its regulated water distribution and wastewater collection utility systems are located in the states of Arizona, Arkansas, California, Illinois, Missouri, New York and Texas, and in Chile. The company's regulated natural gas distribution utility systems located in the province of New Brunswick and the states of Georgia, Illinois, Iowa, Massachusetts, Missouri, New Hampshire and New York. It also owns and operates generating assets with a gross capacity of approximately 2.0 gigawatt (GW) and has investments in generating assets with approximately 0.3 GW of net generation capacity. The company generates and sells electrical energy, capacity, ancillary products, and renewable attributes produced by its renewable and clean power generation facilities. It has economic interests in hydroelectric, wind, solar, renewable natural gas, and thermal facilities. As of December 31, 2023, it had a combined net generating capacity attributable to the Renewable Energy Group of approximately 2.7 GW. The company was incorporated in 1988 and is headquartered in Oakville, 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.