Consolidated Edison (NYSE:ED) and Public Service Enterprise Group (NYSE:PEG) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.
Institutional & Insider Ownership
62.4% of Consolidated Edison shares are held by institutional investors. Comparatively, 69.6% of Public Service Enterprise Group shares are held by institutional investors. 0.2% of Consolidated Edison shares are held by company insiders. Comparatively, 0.5% of Public Service Enterprise Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Consolidated Edison and Public Service Enterprise Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Consolidated Edison | 11.06% | 7.77% | 2.43% |
| Public Service Enterprise Group | 19.74% | 11.30% | 3.58% |
Dividends
Consolidated Edison pays an annual dividend of $3.10 per share and has a dividend yield of 4.0%. Public Service Enterprise Group pays an annual dividend of $2.04 per share and has a dividend yield of 3.2%. Consolidated Edison pays out 70.9% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 62.2% 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. Consolidated Edison has increased its dividend for 47 consecutive years and Public Service Enterprise Group has increased its dividend for 1 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Consolidated Edison has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.
Earnings & Valuation
This table compares Consolidated Edison and Public Service Enterprise Group's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Consolidated Edison | $12.57 billion | 2.13 | $1.34 billion | $4.37 | 17.90 |
| Public Service Enterprise Group | $10.08 billion | 3.18 | $1.69 billion | $3.28 | 19.31 |
Public Service Enterprise Group has lower revenue, but higher earnings 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 current ratings and price targets for Consolidated Edison and Public Service Enterprise Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Consolidated Edison | 5 | 6 | 1 | 0 | 1.67 |
| Public Service Enterprise Group | 0 | 3 | 7 | 0 | 2.70 |
Consolidated Edison currently has a consensus price target of $75.00, suggesting a potential downside of 4.10%. Public Service Enterprise Group has a consensus price target of $64.1111, suggesting a potential upside of 1.20%. Given Public Service Enterprise Group's stronger consensus rating and higher probable upside, analysts plainly believe Public Service Enterprise Group is more favorable than Consolidated Edison.
Summary
Public Service Enterprise Group beats Consolidated Edison on 12 of the 17 factors compared between the two stocks.
