PPL (NYSE:PPL) and Edison International (NYSE:EIX) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, valuation, institutional ownership, risk, earnings, dividends and profitability.
Dividends
PPL pays an annual dividend of $1.66 per share and has a dividend yield of 5.7%. Edison International pays an annual dividend of $2.65 per share and has a dividend yield of 4.3%. PPL pays out 67.8% of its earnings in the form of a dividend. Edison International pays out 56.4% 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. PPL has increased its dividend for 9 consecutive years and Edison International has increased its dividend for 1 consecutive years. PPL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
67.2% of PPL shares are owned by institutional investors. Comparatively, 87.6% of Edison International shares are owned by institutional investors. 0.2% of PPL shares are owned by company insiders. Comparatively, 0.6% of Edison International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
PPL has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Edison International has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for PPL and Edison International, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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PPL | 0 | 9 | 6 | 0 | 2.40 |
Edison International | 0 | 3 | 7 | 0 | 2.70 |
PPL presently has a consensus price target of $34.1786, indicating a potential upside of 17.29%. Edison International has a consensus price target of $68.40, indicating a potential upside of 11.47%. Given PPL's higher possible upside, equities research analysts plainly believe PPL is more favorable than Edison International.
Profitability
This table compares PPL and Edison International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
PPL | 21.93% | 13.76% | 3.91% |
Edison International | 3.23% | 10.57% | 2.51% |
Earnings and Valuation
This table compares PPL and Edison International's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
PPL | $7.77 billion | 2.89 | $1.75 billion | $2.45 | 11.89 |
Edison International | $12.35 billion | 1.89 | $1.41 billion | $4.70 | 13.06 |
PPL has higher earnings, but lower revenue than Edison International. PPL is trading at a lower price-to-earnings ratio than Edison International, indicating that it is currently the more affordable of the two stocks.
Summary
PPL beats Edison International on 9 of the 17 factors compared between the two stocks.