The Southern (NYSE:SO) and Hawaiian Electric Industries (NYSE:HE) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.
Earnings and Valuation
This table compares The Southern and Hawaiian Electric Industries' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Southern | $21.42 billion | 3.09 | $4.75 billion | $3.11 | 20.17 |
| Hawaiian Electric Industries | $2.87 billion | 1.61 | $219.77 million | $1.99 | 21.30 |
The Southern has higher revenue and earnings than Hawaiian Electric Industries. The Southern is trading at a lower price-to-earnings ratio than Hawaiian Electric Industries, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
57.6% of The Southern shares are owned by institutional investors. Comparatively, 47.3% of Hawaiian Electric Industries shares are owned by institutional investors. 0.4% of The Southern shares are owned by insiders. Comparatively, 2.4% of Hawaiian Electric Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Dividends
The Southern pays an annual dividend of $2.56 per share and has a dividend yield of 4.1%. Hawaiian Electric Industries pays an annual dividend of $1.36 per share and has a dividend yield of 3.2%. 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. Hawaiian Electric Industries pays out 68.3% of its earnings in the form of a dividend. The Southern has raised its dividend for 19 consecutive years and Hawaiian Electric Industries has raised its dividend for 1 consecutive years. The Southern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for The Southern and Hawaiian Electric Industries, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Southern | 3 | 2 | 9 | 0 | 2.43 |
| Hawaiian Electric Industries | 3 | 1 | 0 | 0 | 1.25 |
The Southern currently has a consensus target price of $64.7143, suggesting a potential upside of 3.16%. Hawaiian Electric Industries has a consensus target price of $34.50, suggesting a potential downside of 18.59%. Given The Southern's stronger consensus rating and higher possible upside, analysts plainly believe The Southern is more favorable than Hawaiian Electric Industries.
Volatility & Risk
The Southern has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, Hawaiian Electric Industries has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500.
Profitability
This table compares The Southern and Hawaiian Electric Industries' 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% |
| Hawaiian Electric Industries | 8.10% | 9.06% | 1.47% |
Summary
The Southern beats Hawaiian Electric Industries on 14 of the 17 factors compared between the two stocks.
