Sempra Energy (NYSE:SRE) and Consolidated Edison (NYSE:ED) are both large-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.
Analyst Recommendations
This is a breakdown of recent ratings for Sempra Energy and Consolidated Edison, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Sempra Energy | 0 | 5 | 7 | 1 | 2.69 |
Consolidated Edison | 5 | 8 | 1 | 0 | 1.71 |
Sempra Energy presently has a consensus price target of $141.25, suggesting a potential upside of 21.79%. Consolidated Edison has a consensus price target of $76.1154, suggesting a potential upside of 15.94%. Given Sempra Energy's stronger consensus rating and higher probable upside, analysts plainly believe Sempra Energy is more favorable than Consolidated Edison.
Profitability
This table compares Sempra Energy and Consolidated Edison's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Sempra Energy | 34.85% | 11.02% | 3.40% |
Consolidated Edison | 11.06% | 7.77% | 2.43% |
Institutional & Insider Ownership
83.8% of Sempra Energy shares are held by institutional investors. Comparatively, 62.4% of Consolidated Edison shares are held by institutional investors. 0.1% of Sempra Energy shares are held by company insiders. Comparatively, 0.2% of Consolidated Edison shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Dividends
Sempra Energy pays an annual dividend of $4.18 per share and has a dividend yield of 3.6%. Consolidated Edison pays an annual dividend of $3.10 per share and has a dividend yield of 4.7%. Sempra Energy pays out 61.7% of its earnings in the form of a dividend. Consolidated Edison pays out 70.9% 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. Sempra Energy has increased its dividend for 10 consecutive years and Consolidated Edison has increased its dividend for 47 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Sempra Energy and Consolidated Edison's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Sempra Energy | $10.83 billion | 3.09 | $2.20 billion | $6.78 | 17.11 |
Consolidated Edison | $12.57 billion | 1.79 | $1.34 billion | $4.37 | 15.02 |
Sempra Energy has higher earnings, but lower revenue than Consolidated Edison. Consolidated Edison is trading at a lower price-to-earnings ratio than Sempra Energy, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Sempra Energy has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Consolidated Edison has a beta of 0.11, meaning that its stock price is 89% less volatile than the S&P 500.
Summary
Sempra Energy beats Consolidated Edison on 13 of the 18 factors compared between the two stocks.