Centrais Elétricas Brasileiras S.A. - Eletrobrás (NYSE:EBR) and Edison International (NYSE:EIX) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.
Earnings and Valuation
This table compares Centrais Elétricas Brasileiras S.A. - Eletrobrás and Edison International's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Centrais Elétricas Brasileiras S.A. - Eletrobrás | $6.74 billion | 1.24 | $2.71 billion | $1.12 | 5.50 |
Edison International | $12.35 billion | 1.84 | $1.41 billion | $4.70 | 12.73 |
Centrais Elétricas Brasileiras S.A. - Eletrobrás has higher earnings, but lower revenue than Edison International. Centrais Elétricas Brasileiras S.A. - Eletrobrás is trading at a lower price-to-earnings ratio than Edison International, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Centrais Elétricas Brasileiras S.A. - Eletrobrás has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Edison International has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.
Profitability
This table compares Centrais Elétricas Brasileiras S.A. - Eletrobrás and Edison International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Centrais Elétricas Brasileiras S.A. - Eletrobrás | 49.42% | 11.19% | 4.57% |
Edison International | 3.23% | 10.57% | 2.51% |
Dividends
Centrais Elétricas Brasileiras S.A. - Eletrobrás pays an annual dividend of $0.53 per share and has a dividend yield of 8.6%. Edison International pays an annual dividend of $2.65 per share and has a dividend yield of 4.4%. Centrais Elétricas Brasileiras S.A. - Eletrobrás pays out 47.3% of its earnings in the form of a dividend. Edison International pays out 56.4% 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. Edison International has raised its dividend for 1 consecutive years. Centrais Elétricas Brasileiras S.A. - Eletrobrás is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Centrais Elétricas Brasileiras S.A. - Eletrobrás and Edison International, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Centrais Elétricas Brasileiras S.A. - Eletrobrás | 0 | 0 | 0 | 0 | N/A |
Edison International | 0 | 3 | 7 | 0 | 2.70 |
Edison International has a consensus price target of $68.40, indicating a potential upside of 14.30%. Given Edison International's higher possible upside, analysts plainly believe Edison International is more favorable than Centrais Elétricas Brasileiras S.A. - Eletrobrás.
Insider and Institutional Ownership
87.6% of Edison International shares are owned by institutional investors. 0.6% of Edison International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Edison International beats Centrais Elétricas Brasileiras S.A. - Eletrobrás on 9 of the 16 factors compared between the two stocks.