E.On (OTCMKTS:EONGY) and Public Service Enterprise Group (NYSE:PEG) are both large-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.
Dividends
E.On pays an annual dividend of $0.38 per share and has a dividend yield of 3.8%. Public Service Enterprise Group pays an annual dividend of $1.96 per share and has a dividend yield of 3.6%. E.On pays out 50.7% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 59.8% 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. Public Service Enterprise Group has increased its dividend for 1 consecutive years. E.On is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
0.1% of E.On shares are owned by institutional investors. Comparatively, 69.6% of Public Service Enterprise Group shares are owned by institutional investors. 0.5% of Public Service Enterprise Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares E.On and Public Service Enterprise Group's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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E.On | $45.93 billion | 0.47 | $1.75 billion | $0.75 | 13.39 |
Public Service Enterprise Group | $10.08 billion | 2.72 | $1.69 billion | $3.28 | 16.54 |
E.On has higher revenue and earnings than Public Service Enterprise Group. E.On 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.
Volatility and Risk
E.On has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.
Profitability
This table compares E.On and Public Service Enterprise Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
E.On | 0.61% | 12.32% | 1.29% |
Public Service Enterprise Group | 19.74% | 11.30% | 3.58% |
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for E.On and Public Service Enterprise Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
E.On | 2 | 5 | 8 | 0 | 2.40 |
Public Service Enterprise Group | 0 | 3 | 9 | 0 | 2.75 |
Public Service Enterprise Group has a consensus target price of $63.7273, indicating a potential upside of 17.47%. Given Public Service Enterprise Group's stronger consensus rating and higher probable upside, analysts plainly believe Public Service Enterprise Group is more favorable than E.On.
Summary
Public Service Enterprise Group beats E.On on 12 of the 17 factors compared between the two stocks.