American Electric Power (NASDAQ:AEP – Get Free Report) and Spruce Power (NYSE:SPRU – Get Free Report) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.
Institutional and Insider Ownership
75.2% of American Electric Power shares are owned by institutional investors. Comparatively, 20.8% of Spruce Power shares are owned by institutional investors. 0.1% of American Electric Power shares are owned by insiders. Comparatively, 9.6% of Spruce Power shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares American Electric Power and Spruce Power’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Electric Power | 13.48% | 11.41% | 3.01% |
| Spruce Power | -121.98% | -23.98% | -5.48% |
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Electric Power | $19.60 billion | 2.58 | $2.21 billion | $4.99 | 19.06 |
| Spruce Power | $77.58 million | 0.68 | -$65.83 million | ($5.06) | -0.56 |
American Electric Power has higher revenue and earnings than Spruce Power. Spruce Power is trading at a lower price-to-earnings ratio than American Electric Power, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
American Electric Power has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Spruce Power has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and price targets for American Electric Power and Spruce Power, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Electric Power | 1 | 8 | 5 | 0 | 2.29 |
| Spruce Power | 0 | 0 | 0 | 0 | 0.00 |
American Electric Power presently has a consensus target price of $98.00, indicating a potential upside of 3.03%. Given American Electric Power’s stronger consensus rating and higher probable upside, analysts clearly believe American Electric Power is more favorable than Spruce Power.
Summary
American Electric Power beats Spruce Power on 12 of the 14 factors compared between the two stocks.
About American Electric Power
American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments. The company generates electricity using coal and lignite, natural gas, renewable, nuclear, hydro, solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. American Electric Power Company, Inc. was incorporated in 1906 and is headquartered in Columbus, Ohio.
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.
Receive News & Ratings for American Electric Power Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for American Electric Power and related companies with MarketBeat.com's FREE daily email newsletter.
