Xcel Energy (NASDAQ:XEL) and Public Service Enterprise Group (NYSE:PEG) are both large-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.
Dividends
Xcel Energy pays an annual dividend of $1.72 per share and has a dividend yield of 2.9%. Public Service Enterprise Group pays an annual dividend of $1.96 per share and has a dividend yield of 3.6%. Xcel Energy pays out 65.2% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 59.8% 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. Xcel Energy has raised its dividend for 17 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.
Profitability
This table compares Xcel Energy and Public Service Enterprise Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Xcel Energy | 12.50% | 10.56% | 2.73% |
Public Service Enterprise Group | 19.74% | 11.30% | 3.58% |
Valuation and Earnings
This table compares Xcel Energy and Public Service Enterprise Group's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Xcel Energy | $11.53 billion | 2.76 | $1.37 billion | $2.64 | 22.41 |
Public Service Enterprise Group | $10.08 billion | 2.77 | $1.69 billion | $3.28 | 16.80 |
Public Service Enterprise Group has lower revenue, but higher earnings than Xcel Energy. Public Service Enterprise Group is trading at a lower price-to-earnings ratio than Xcel Energy, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
77.9% of Xcel Energy shares are held by institutional investors. Comparatively, 69.6% of Public Service Enterprise Group shares are held by institutional investors. 0.2% of Xcel Energy shares are held by company insiders. Comparatively, 0.5% of Public Service Enterprise Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of current recommendations and price targets for Xcel Energy and Public Service Enterprise Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Xcel Energy | 1 | 8 | 2 | 0 | 2.09 |
Public Service Enterprise Group | 0 | 3 | 9 | 0 | 2.75 |
Xcel Energy currently has a consensus target price of $68.80, suggesting a potential upside of 16.31%. Public Service Enterprise Group has a consensus target price of $63.7273, suggesting a potential upside of 15.68%. Given Xcel Energy's higher probable upside, equities analysts plainly believe Xcel Energy is more favorable than Public Service Enterprise Group.
Risk and Volatility
Xcel Energy has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.
Summary
Public Service Enterprise Group beats Xcel Energy on 12 of the 17 factors compared between the two stocks.