Edison International (NYSE:EIX) and The Southern (NYSE:SO) are both large-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.
Volatility and Risk
Edison International has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, The Southern has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500.
Dividends
Edison International pays an annual dividend of $2.65 per share and has a dividend yield of 4.5%. The Southern pays an annual dividend of $2.56 per share and has a dividend yield of 3.9%. Edison International pays out 56.4% of its earnings in the form of a dividend. 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. Edison International has raised its dividend for 1 consecutive years and The Southern has raised its dividend for 19 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Edison International and The Southern's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Edison International | $12.35 billion | 1.83 | $1.41 billion | $4.70 | 12.66 |
The Southern | $21.42 billion | 3.22 | $4.75 billion | $3.11 | 20.93 |
The Southern has higher revenue and earnings than Edison International. Edison International is trading at a lower price-to-earnings ratio than The Southern, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Edison International and The Southern, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Edison International | 0 | 3 | 7 | 0 | 2.70 |
The Southern | 3 | 2 | 8 | 0 | 2.38 |
Edison International presently has a consensus target price of $68.60, suggesting a potential upside of 15.33%. The Southern has a consensus target price of $65.7692, suggesting a potential upside of 1.03%. Given Edison International's stronger consensus rating and higher possible upside, equities research analysts clearly believe Edison International is more favorable than The Southern.
Institutional & Insider Ownership
87.6% of Edison International shares are held by institutional investors. Comparatively, 57.6% of The Southern shares are held by institutional investors. 0.6% of Edison International shares are held by company insiders. Comparatively, 0.4% of The Southern shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Edison International and The Southern's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Edison International | 3.23% | 10.57% | 2.51% |
The Southern | 15.80% | 10.08% | 2.69% |
Summary
Edison International beats The Southern on 10 of the 17 factors compared between the two stocks.