Talen Energy (NASDAQ:TLN) vs. Hawaiian Electric Industries (NYSE:HE) Financial Analysis

Hawaiian Electric Industries (NYSE:HE) and Talen Energy (NASDAQ:TLN) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Valuation & Earnings

This table compares Hawaiian Electric Industries and Talen Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawaiian Electric Industries	$3.69 billion	0.48	$201.13 million	($11.83)	-0.86
Talen Energy	$2.55 billion	4.13	$613.00 million	$18.68	11.11

Talen Energy has lower revenue, but higher earnings than Hawaiian Electric Industries. Hawaiian Electric Industries is trading at a lower price-to-earnings ratio than Talen Energy, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

59.9% of Hawaiian Electric Industries shares are held by institutional investors. Comparatively, 0.4% of Talen Energy shares are held by institutional investors. 0.3% of Hawaiian Electric Industries shares are held by insiders. Comparatively, 0.2% of Talen Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Hawaiian Electric Industries and Talen Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hawaiian Electric Industries	-35.38%	11.12%	1.19%
Talen Energy	50.48%	8.59%	3.13%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hawaiian Electric Industries and Talen Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawaiian Electric Industries	0	3	0	0	2.00
Talen Energy	0	0	10	0	3.00

Hawaiian Electric Industries currently has a consensus price target of $11.00, suggesting a potential upside of 7.84%. Talen Energy has a consensus price target of $222.40, suggesting a potential upside of 7.20%. Given Hawaiian Electric Industries’ higher probable upside, equities research analysts clearly believe Hawaiian Electric Industries is more favorable than Talen Energy.

Summary

Talen Energy beats Hawaiian Electric Industries on 8 of the 13 factors compared between the two stocks.

About Hawaiian Electric Industries

Hawaiian Electric Industries, Inc., together with its subsidiaries, engages in the electric utility businesses in the United States. It operates in three segments: Electric Utility, Bank, and Other. The Electric Utility segment engages in the production, purchase, transmission, distribution, and sale of electricity in the islands of Oahu, Hawaii, Maui, Lanai, and Molokai. Its renewable energy sources and potential sources include wind, solar, photovoltaic, geothermal, wave, hydroelectric, municipal waste, and other biofuels. This segment serves suburban communities, resorts, the United States Armed Forces installations, and agricultural operations. The Bank segment operates a federally chartered savings bank that offers banking and other financial services to consumers and businesses, including savings and checking accounts; and loans comprising residential and commercial real estate, residential mortgage, construction and development, multifamily residential and commercial real estate, consumer, and commercial loans. The Other segment invests in non-regulated renewable energy and sustainable infrastructure in the State of Hawaii. Hawaiian Electric Industries, Inc. was founded in 1891 and is headquartered in Honolulu, Hawaii.

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.