The Southern (NYSE:SO) and OGE Energy (NYSE:OGE) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
Risk and Volatility
The Southern has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, OGE Energy has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.
Profitability
This table compares The Southern and OGE 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% |
| OGE Energy | -9.15% | 10.44% | 3.68% |
Earnings & Valuation
This table compares The Southern and OGE Energy's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Southern | $21.42 billion | 3.10 | $4.75 billion | $3.11 | 20.22 |
| OGE Energy | $2.23 billion | 2.91 | $433.60 million | $2.16 | 15.00 |
The Southern has higher revenue and earnings than OGE Energy. OGE 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.
Analyst Ratings
This is a breakdown of current ratings for The Southern and OGE Energy, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Southern | 3 | 2 | 9 | 0 | 2.43 |
| OGE Energy | 1 | 4 | 3 | 0 | 2.25 |
The Southern currently has a consensus price target of $64.8571, suggesting a potential upside of 3.13%. OGE Energy has a consensus price target of $35.00, suggesting a potential upside of 8.06%. Given OGE Energy's higher possible upside, analysts clearly believe OGE Energy is more favorable than The Southern.
Insider & Institutional Ownership
57.6% of The Southern shares are owned by institutional investors. Comparatively, 61.6% of OGE Energy shares are owned by institutional investors. 0.4% of The Southern shares are owned by insiders. Comparatively, 0.5% of OGE Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company 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%. OGE Energy pays an annual dividend of $1.61 per share and has a dividend yield of 5.0%. 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. OGE Energy pays out 74.5% of its earnings in the form of a dividend. The Southern has increased its dividend for 19 consecutive years and OGE Energy has increased its dividend for 7 consecutive years. OGE Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
The Southern beats OGE Energy on 9 of the 17 factors compared between the two stocks.
