Critical Review: Central Puerto (NYSE:CEPU) and Terna (OTCMKTS:TERRF)

Central Puerto (NYSE:CEPU) and Terna (OTCMKTS:TERRF) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Valuation and Earnings

This table compares Central Puerto and Terna’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Central Puerto	$1.20 billion	1.16	$564.64 million	$2.37	3.85
Terna	N/A	N/A	N/A	$0.26	28.89

Central Puerto has higher revenue and earnings than Terna. Central Puerto is trading at a lower price-to-earnings ratio than Terna, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Central Puerto and Terna, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Central Puerto	0	1	0	0	2.00
Terna	0	1	0	0	2.00

Central Puerto presently has a consensus target price of $8.00, indicating a potential downside of 12.38%. Given Central Puerto’s higher possible upside, equities analysts plainly believe Central Puerto is more favorable than Terna.

Dividends

Central Puerto pays an annual dividend of $0.19 per share and has a dividend yield of 2.1%. Terna pays an annual dividend of $0.16 per share and has a dividend yield of 2.1%. Central Puerto pays out 8.0% of its earnings in the form of a dividend. Terna pays out 61.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Insider & Institutional Ownership

3.0% of Central Puerto shares are held by institutional investors. Comparatively, 20.2% of Terna shares are held by institutional investors. 0.1% of Central Puerto shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Central Puerto and Terna’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Central Puerto	50.95%	25.37%	17.55%
Terna	N/A	N/A	N/A

Summary

Central Puerto beats Terna on 8 of the 11 factors compared between the two stocks.

About Central Puerto

Central Puerto S.A. engages in the electric power generation in Argentina. It operates through three segments: Electric Power Generation from Conventional Sources, Electric Power Generation from Renewable Sources, and Natural Gas Transport and Distribution. The company generates energy through thermal, hydroelectric, and wind farms. It also engages in the natural gas transport and distribution business. Central Puerto S.A. was founded in 1898 and is based in Buenos Aires, Argentina.

About Terna

Terna S.p.A., together with its subsidiaries, engages in the electricity transmission and dispatching activities in Italy, Euro-area countries, and internationally. The company operates through Regulated, Non-Regulated, and International segments. It is involved in the planning, development, management, operation, and maintenance of national transmission grid; dispatching and metering; and construction of storage systems. The company also offers connectivity services, energy solutions, telecommunications systems and equipment, and operation and maintenance services. In addition, it designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids, industrial transformers for the steel and metals industries, and special transformers for convertors used in electrochemical production; designs, produces, and supplies marine and terrestrial cables; implements and develops renewable energy projects; and undertakes private interconnector projects. The company was founded in 1999 and is headquartered in Rome, Italy.