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Azure Power Global (NYSE:AZRE) and Pattern Energy Group (NASDAQ:PEGI) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Earnings and Valuation

This table compares Azure Power Global and Pattern Energy Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Azure Power Global $118.27 million 3.78 -$12.60 million ($0.65) -16.85
Pattern Energy Group $483.00 million 4.46 $142.00 million $1.45 15.14

Pattern Energy Group has higher revenue and earnings than Azure Power Global. Azure Power Global is trading at a lower price-to-earnings ratio than Pattern Energy Group, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Azure Power Global has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500. Comparatively, Pattern Energy Group has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Dividends

Pattern Energy Group pays an annual dividend of $1.69 per share and has a dividend yield of 7.7%. Azure Power Global does not pay a dividend. Pattern Energy Group pays out 116.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pattern Energy Group has increased its dividend for 4 consecutive years.

Profitability

This table compares Azure Power Global and Pattern Energy Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Azure Power Global 0.24% 0.81% 0.15%
Pattern Energy Group 29.62% 6.45% 2.68%

Analyst Recommendations

This is a breakdown of recent recommendations for Azure Power Global and Pattern Energy Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Azure Power Global 0 1 4 0 2.80
Pattern Energy Group 1 4 4 0 2.33

Azure Power Global presently has a consensus target price of $22.00, suggesting a potential upside of 100.91%. Pattern Energy Group has a consensus target price of $22.17, suggesting a potential upside of 0.94%. Given Azure Power Global’s stronger consensus rating and higher possible upside, equities analysts plainly believe Azure Power Global is more favorable than Pattern Energy Group.

Insider and Institutional Ownership

51.8% of Azure Power Global shares are held by institutional investors. Comparatively, 82.9% of Pattern Energy Group shares are held by institutional investors. 1.7% of Pattern Energy Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Pattern Energy Group beats Azure Power Global on 12 of the 16 factors compared between the two stocks.

About Azure Power Global

Azure Power Global Limited, together with its subsidiaries, engages in the development, construction, ownership, operation, maintenance, and management of solar power plants in India. It generates solar energy based on long-term contracts with Indian government energy distribution companies, as well as other non-governmental energy distribution companies and commercial customers. As of March 31, 2018, the company had a portfolio capacity of approximately 1,871 megawatts. Azure Power Global Limited was founded in 2007 and is based in New Delhi, India.

About Pattern Energy Group

Pattern Energy Group Inc., an independent power company, focuses on the construction, ownership, and operation of various power projects in the United States, Canada, and Chile. It holds interests in various wind and solar power projects. The company sells electricity and renewable energy credits primarily to local utilities and local liquid independent system organizations markets. Pattern Energy Group Inc. was founded in 2012 and is headquartered in San Francisco, California.



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