Black Hills (NYSE:BKH) and WEC Energy Group (NYSE:WEC) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.
Profitability
This table compares Black Hills and WEC Energy Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Black Hills | 13.01% | 8.71% | 2.93% |
WEC Energy Group | 16.26% | 11.36% | 3.37% |
Risk & Volatility
Black Hills has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Black Hills and WEC Energy Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Black Hills | 0 | 1 | 8 | 0 | 2.89 |
WEC Energy Group | 3 | 4 | 3 | 0 | 2.00 |
Black Hills presently has a consensus price target of $73.00, suggesting a potential upside of 21.87%. WEC Energy Group has a consensus price target of $94.20, suggesting a potential upside of 13.71%. Given Black Hills' stronger consensus rating and higher possible upside, analysts plainly believe Black Hills is more favorable than WEC Energy Group.
Dividends
Black Hills pays an annual dividend of $2.26 per share and has a dividend yield of 3.8%. WEC Energy Group pays an annual dividend of $2.71 per share and has a dividend yield of 3.3%. Black Hills pays out 64.0% of its earnings in the form of a dividend. WEC Energy Group pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Black Hills has raised its dividend for 4 consecutive years and WEC Energy Group has raised its dividend for 1 consecutive years. Black Hills is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
85.5% of Black Hills shares are owned by institutional investors. Comparatively, 73.1% of WEC Energy Group shares are owned by institutional investors. 1.0% of Black Hills shares are owned by insiders. Comparatively, 0.3% of WEC Energy Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Black Hills and WEC Energy Group's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Black Hills | $1.73 billion | 2.16 | $199.31 million | $3.53 | 16.96 |
WEC Energy Group | $7.52 billion | 3.47 | $1.14 billion | $3.58 | 23.13 |
WEC Energy Group has higher revenue and earnings than Black Hills. Black Hills is trading at a lower price-to-earnings ratio than WEC Energy Group, indicating that it is currently the more affordable of the two stocks.
Summary
Black Hills beats WEC Energy Group on 9 of the 17 factors compared between the two stocks.