The Southern (NYSE:SO) and Duke Energy (NYSE:DUK) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.
Institutional and Insider Ownership
57.6% of The Southern shares are owned by institutional investors. Comparatively, 63.5% of Duke Energy shares are owned by institutional investors. 0.4% of The Southern shares are owned by insiders. Comparatively, 0.1% of Duke Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares The Southern and Duke Energy's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
The Southern | 15.80% | 10.08% | 2.69% |
Duke Energy | 8.68% | 8.28% | 2.35% |
Earnings and Valuation
This table compares The Southern and Duke Energy's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
The Southern | $21.42 billion | 2.94 | $4.75 billion | $3.11 | 19.17 |
Duke Energy | $25.08 billion | 2.77 | $3.75 billion | $5.06 | 17.83 |
The Southern has higher earnings, but lower revenue than Duke Energy. Duke Energy is trading at a lower price-to-earnings ratio than The Southern, indicating that it is currently the more affordable of the two stocks.
Dividends
The Southern pays an annual dividend of $2.56 per share and has a dividend yield of 4.3%. Duke Energy pays an annual dividend of $3.86 per share and has a dividend yield of 4.3%. The Southern pays out 82.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Duke Energy pays out 76.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Southern has increased its dividend for 19 consecutive years and Duke Energy has increased its dividend for 14 consecutive years. The Southern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
The Southern has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500. Comparatively, Duke Energy has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings for The Southern and Duke Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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The Southern | 3 | 3 | 9 | 0 | 2.40 |
Duke Energy | 0 | 9 | 2 | 0 | 2.18 |
The Southern currently has a consensus price target of $64.3571, indicating a potential upside of 7.96%. Duke Energy has a consensus price target of $97.2727, indicating a potential upside of 7.82%. Given The Southern's stronger consensus rating and higher probable upside, research analysts clearly believe The Southern is more favorable than Duke Energy.
Summary
The Southern beats Duke Energy on 12 of the 17 factors compared between the two stocks.