Talen Energy (NASDAQ:TLN) versus Ormat Technologies (NYSE:ORA) Critical Comparison

Ormat Technologies (NYSE:ORA) and Talen Energy (NASDAQ:TLN) are both mid-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ormat Technologies	14.89%	5.40%	2.50%
Talen Energy	41.79%	2.27%	0.82%

Insider and Institutional Ownership

95.5% of Ormat Technologies shares are owned by institutional investors. Comparatively, 0.4% of Talen Energy shares are owned by institutional investors. 0.5% of Ormat Technologies shares are owned by insiders. Comparatively, 0.2% of Talen Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Ormat Technologies and Talen Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ormat Technologies	0	3	3	0	2.50
Talen Energy	0	0	9	0	3.00

Ormat Technologies presently has a consensus target price of $81.67, suggesting a potential upside of 4.29%. Talen Energy has a consensus target price of $205.89, suggesting a potential upside of 18.35%. Given Talen Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Talen Energy is more favorable than Ormat Technologies.

Valuation and Earnings

This table compares Ormat Technologies and Talen Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ormat Technologies	$829.42 million	5.71	$124.40 million	$2.19	35.76
Talen Energy	$4.23 billion	2.09	$613.00 million	N/A	N/A

Talen Energy has higher revenue and earnings than Ormat Technologies.

Summary

Talen Energy beats Ormat Technologies on 6 of the 11 factors compared between the two stocks.

About Ormat Technologies

Ormat Technologies, Inc. engages in the geothermal and recovered energy power business in the United States, Indonesia, Kenya, Turkey, Chile, Guatemala, Guadeloupe, New Zealand, Honduras, and internationally. It operates in three segments: Electricity, Product, and Energy Storage. The Electricity segment develops, builds, owns, and operates geothermal, solar photovoltaic, and recovered energy-based power plants; and sells electricity. The Product segment designs, manufactures, and sells equipment for geothermal and recovered energy-based electricity generation; and provides services relating to the engineering, procurement, construction, operation, and maintenance of geothermal and recovered energy-based power plants. This segment serves contractors; and owners and operators of interstate natural gas pipelines, gas processing plants, and cement plants, as well as companies in other energy-intensive industrial processes. The Energy Storage segment offers battery energy storage systems and related services. Ormat Technologies, Inc. was founded in 1965 and is headquartered in Reno, Nevada.

About Talen Energy

Talen Energy Corporation is a U.S.-based energy and power generation company. The Company owns or controls approximately 16,000 megawatts of capacity in wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. The Company generates and sells electricity, capacity and related products from power plants that use fuel sources, such as nuclear, natural gas and coal. The Company’s Susquehanna nuclear power plant has approximately two boiling water reactors with a combined capacity of over 2,600 megawatts. Its fossil fuel plants are located in Athens, Barney Davis, Bayonne, Brandon Shores, Brunner Island, Camden, Colstrip and Dartmouth, among others. It has an art energy trading center located in Allentown, Pennsylvania (PA), where it manages asset load obligations, fuel supply, capacity and related products, and all supporting physical or financial transactions for its electric generation portfolio.