Public Service Enterprise Group (NYSE:PEG) and Consolidated Edison (NYSE:ED) are both large-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.
Dividends
Public Service Enterprise Group pays an annual dividend of $1.96 per share and has a dividend yield of 3.6%. Consolidated Edison pays an annual dividend of $3.10 per share and has a dividend yield of 4.6%. Public Service Enterprise Group pays out 59.8% of its earnings in the form of a dividend. Consolidated Edison pays out 70.9% 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. Public Service Enterprise Group has increased its dividend for 1 consecutive years and Consolidated Edison has increased its dividend for 47 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
69.6% of Public Service Enterprise Group shares are owned by institutional investors. Comparatively, 62.4% of Consolidated Edison shares are owned by institutional investors. 0.5% of Public Service Enterprise Group shares are owned by insiders. Comparatively, 0.2% of Consolidated Edison shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Public Service Enterprise Group and Consolidated Edison's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Public Service Enterprise Group | $10.08 billion | 2.77 | $1.69 billion | $3.28 | 16.80 |
Consolidated Edison | $12.57 billion | 1.83 | $1.34 billion | $4.37 | 15.34 |
Public Service Enterprise Group has higher earnings, but lower revenue than Consolidated Edison. Consolidated Edison is trading at a lower price-to-earnings ratio than Public Service Enterprise Group, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Public Service Enterprise Group and Consolidated Edison, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Public Service Enterprise Group | 0 | 3 | 9 | 0 | 2.75 |
Consolidated Edison | 5 | 8 | 1 | 0 | 1.71 |
Public Service Enterprise Group presently has a consensus price target of $63.7273, indicating a potential upside of 15.68%. Consolidated Edison has a consensus price target of $76.1154, indicating a potential upside of 13.54%. Given Public Service Enterprise Group's stronger consensus rating and higher possible upside, equities research analysts plainly believe Public Service Enterprise Group is more favorable than Consolidated Edison.
Volatility & Risk
Public Service Enterprise Group has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, Consolidated Edison has a beta of 0.11, meaning that its stock price is 89% less volatile than the S&P 500.
Profitability
This table compares Public Service Enterprise Group and Consolidated Edison's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Public Service Enterprise Group | 19.74% | 11.30% | 3.58% |
Consolidated Edison | 11.06% | 7.77% | 2.43% |
Summary
Public Service Enterprise Group beats Consolidated Edison on 12 of the 17 factors compared between the two stocks.