Hallador Energy (NASDAQ:HNRG – Get Free Report) and Pinnacle West Capital (NYSE:PNW – Get Free Report) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.
Dividends
Hallador Energy pays an annual dividend of $0.16 per share and has a dividend yield of 1.4%. Pinnacle West Capital pays an annual dividend of $3.58 per share and has a dividend yield of 4.2%. Hallador Energy pays out -29.1% of its earnings in the form of a dividend. Pinnacle West Capital pays out 67.8% 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. Pinnacle West Capital has raised its dividend for 13 consecutive years. Pinnacle West Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Hallador Energy and Pinnacle West Capital”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hallador Energy | $429.36 million | 1.17 | $44.79 million | ($0.55) | -21.35 |
| Pinnacle West Capital | $5.02 billion | 1.91 | $501.56 million | $5.28 | 15.96 |
Analyst Recommendations
This is a summary of current recommendations for Hallador Energy and Pinnacle West Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hallador Energy | 0 | 0 | 2 | 0 | 3.00 |
| Pinnacle West Capital | 0 | 7 | 6 | 0 | 2.46 |
Hallador Energy presently has a consensus price target of $15.00, indicating a potential upside of 27.77%. Pinnacle West Capital has a consensus price target of $84.65, indicating a potential upside of 0.48%. Given Hallador Energy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Hallador Energy is more favorable than Pinnacle West Capital.
Institutional and Insider Ownership
61.4% of Hallador Energy shares are held by institutional investors. Comparatively, 91.5% of Pinnacle West Capital shares are held by institutional investors. 32.3% of Hallador Energy shares are held by company insiders. Comparatively, 0.2% of Pinnacle West Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Hallador Energy and Pinnacle West Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hallador Energy | -4.85% | -6.71% | -3.39% |
| Pinnacle West Capital | 12.26% | 9.60% | 2.43% |
Volatility and Risk
Hallador Energy has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Pinnacle West Capital has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.
Summary
Pinnacle West Capital beats Hallador Energy on 12 of the 17 factors compared between the two stocks.
About Hallador Energy
Hallador Energy Company, through its subsidiaries, engages in the production of steam coal in the State of Indiana for the electric power generation industry. The company owns the Oaktown Mine 1 and Oaktown Mine 2 underground mines in Oaktown; Freelandville Center Pit surface mine in Freelandville; and Prosperity Surface mine in Petersburg, Indiana. It is also involved in gas exploration activities in Indiana; and operation of logistics transport facility. Hallador Energy Company was founded in 1949 and is headquartered in Terre Haute, Indiana.
About Pinnacle West Capital
Pinnacle West Capital Corporation, through its subsidiary, provides retail and wholesale electric services primarily in the state of Arizona. The company engages in the generation, transmission, and distribution of electricity using coal, nuclear, gas, oil, and solar generating facilities. Its transmission facilities include overhead lines and underground lines; and distribution facilities consist of overhead lines and underground primary cables. The company also owns and maintains transmission and distribution substations; and owns energy storage facilities. Pinnacle West Capital Corporation was incorporated in 1985 and is headquartered in Phoenix, Arizona.
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