Alliant Energy (NASDAQ:LNT) and Public Service Enterprise Group (NYSE:PEG) are both large-cap utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, risk, valuation, dividends and profitability.
Volatility and Risk
Alliant Energy has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Alliant Energy and Public Service Enterprise Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Alliant Energy | 0 | 4 | 2 | 0 | 2.33 |
| Public Service Enterprise Group | 0 | 2 | 8 | 0 | 2.80 |
Alliant Energy presently has a consensus target price of $56.1667, suggesting a potential downside of 1.05%. Public Service Enterprise Group has a consensus target price of $65.9444, suggesting a potential upside of 5.48%. Given Public Service Enterprise Group's stronger consensus rating and higher probable upside, analysts plainly believe Public Service Enterprise Group is more favorable than Alliant Energy.
Profitability
This table compares Alliant Energy and Public Service Enterprise Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Alliant Energy | 19.33% | 12.01% | 3.86% |
| Public Service Enterprise Group | 19.74% | 11.30% | 3.58% |
Earnings and Valuation
This table compares Alliant Energy and Public Service Enterprise Group's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Alliant Energy | $3.65 billion | 3.89 | $567.40 million | $2.31 | 24.57 |
| Public Service Enterprise Group | $10.08 billion | 3.14 | $1.69 billion | $3.28 | 19.06 |
Public Service Enterprise Group has higher revenue and earnings than Alliant Energy. Public Service Enterprise Group is trading at a lower price-to-earnings ratio than Alliant Energy, indicating that it is currently the more affordable of the two stocks.
Dividends
Alliant Energy pays an annual dividend of $1.61 per share and has a dividend yield of 2.8%. Public Service Enterprise Group pays an annual dividend of $2.04 per share and has a dividend yield of 3.3%. Alliant Energy pays out 69.7% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 62.2% 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. Alliant Energy has raised its dividend for 1 consecutive years and Public Service Enterprise Group has raised its dividend for 1 consecutive years. Public Service Enterprise Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
73.0% of Alliant Energy shares are owned by institutional investors. Comparatively, 69.6% of Public Service Enterprise Group shares are owned by institutional investors. 0.3% of Alliant Energy shares are owned by insiders. Comparatively, 0.5% of Public Service Enterprise Group 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
Public Service Enterprise Group beats Alliant Energy on 11 of the 16 factors compared between the two stocks.
