Head-To-Head Comparison: American Electric Power (NASDAQ:AEP) and Talen Energy (OTCMKTS:TLNE)

American Electric Power (NASDAQ:AEP) and Talen Energy (OTCMKTS:TLNE) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for American Electric Power and Talen Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Electric Power	1	5	6	0	2.42
Talen Energy	0	0	3	0	3.00

American Electric Power currently has a consensus target price of $88.92, indicating a potential upside of 2.15%. Talen Energy has a consensus target price of $101.00, indicating a potential downside of 15.20%. Given American Electric Power’s higher possible upside, equities analysts clearly believe American Electric Power is more favorable than Talen Energy.

Valuation & Earnings

This table compares American Electric Power and Talen Energy’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Electric Power	$19.00 billion	2.42	$2.21 billion	$5.39	16.15
Talen Energy	$2.55 billion	2.75	$613.00 million	N/A	N/A

American Electric Power has higher revenue and earnings than Talen Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Electric Power	14.60%	11.23%	2.93%
Talen Energy	N/A	1.93%	0.67%

Insider and Institutional Ownership

75.2% of American Electric Power shares are owned by institutional investors. Comparatively, 0.4% of Talen Energy shares are owned by institutional investors. 0.1% of American Electric Power shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

American Electric Power beats Talen Energy on 9 of the 11 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 Talen Energy

Talen Energy Corporation, an independent power producer and infrastructure company, produces and sells electricity, capacity, and ancillary services into wholesale power markets in the United States. The company operates nuclear, fossil, solar, and coal power plants. It is also developing battery storage projects. The company owns and operates approximately 10.7 GW of power infrastructure. Talen Energy Corporation is headquartered in Houston, Texas.