Pacific Gas & Electric Co. (NYSE: PCG) and Empresa Nacional de Electricidad (NYSE:EOCC) are both mid-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitabiliy, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.
Pacific Gas & Electric Co. pays an annual dividend of $1.96 per share and has a dividend yield of 2.8%. Empresa Nacional de Electricidad pays an annual dividend of $1.14 per share and has a dividend yield of 5.0%. Pacific Gas & Electric Co. pays out 53.4% of its earnings in the form of a dividend. Empresa Nacional de Electricidad pays out 42.9% 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. Empresa Nacional de Electricidad is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Pacific Gas & Electric Co. has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500. Comparatively, Empresa Nacional de Electricidad has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.
Earnings & Valuation
This table compares Pacific Gas & Electric Co. and Empresa Nacional de Electricidad’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pacific Gas & Electric Co.||$17.96 billion||1.96||$5.96 billion||$3.67||18.82|
|Empresa Nacional de Electricidad||$2.43 billion||2.56||$933.21 million||$2.66||8.54|
Pacific Gas & Electric Co. has higher revenue and earnings than Empresa Nacional de Electricidad. Empresa Nacional de Electricidad is trading at a lower price-to-earnings ratio than Pacific Gas & Electric Co., indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
82.3% of Pacific Gas & Electric Co. shares are held by institutional investors. Comparatively, 3.2% of Empresa Nacional de Electricidad shares are held by institutional investors. 0.2% of Pacific Gas & Electric Co. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This table compares Pacific Gas & Electric Co. and Empresa Nacional de Electricidad’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pacific Gas & Electric Co.||10.42%||11.33%||2.99%|
|Empresa Nacional de Electricidad||N/A||N/A||N/A|
This is a breakdown of current recommendations and price targets for Pacific Gas & Electric Co. and Empresa Nacional de Electricidad, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pacific Gas & Electric Co.||0||3||8||0||2.73|
|Empresa Nacional de Electricidad||1||0||0||0||1.00|
Pacific Gas & Electric Co. currently has a consensus target price of $70.44, indicating a potential upside of 2.00%. Given Pacific Gas & Electric Co.’s stronger consensus rating and higher possible upside, research analysts clearly believe Pacific Gas & Electric Co. is more favorable than Empresa Nacional de Electricidad.
Pacific Gas & Electric Co. beats Empresa Nacional de Electricidad on 12 of the 16 factors compared between the two stocks.
About Pacific Gas & Electric Co.
PG&E Corporation is a holding company. The Company’s primary operating subsidiary is Pacific Gas and Electric Company (the Utility), which operates in northern and central California. The Utility is engaged in the sale and delivery of electricity and natural gas to customers. The Utility generates electricity and provides electricity transmission and distribution services throughout its service territory in northern and central California to residential, commercial, industrial, and agricultural customers. The Utility provides bundled services (electricity, transmission and distribution services) to various customers in its service territory. As of December 31, 2016, the Utility owned approximately 18,400 circuit miles of interconnected transmission lines operating at voltages ranging from 60 kilovolt to 500 kilovolt. As of December 31, 2016, the Utility also operated 92 electric transmission substations with a capacity of approximately 64,600 megavolt ampere (MVA).
About Empresa Nacional de Electricidad
Enel Generacion Chile SA, formerly Empresa Nacional De Electricidad SA, is a Chile-based company engaged in the business of electricity generation. The Company operates in Chile. The Company owns and operates a total of approximately 111-generation units in Chile both directly and through its subsidiaries, Pehuenche, Celta and GasAtacama. Of these generation units, approximately 38 are hydroelectric, with a total installed capacity of over 3,470 megawatts. There are approximately 22 thermal generation units that operate with gas, coal or oil with a total installed capacity of over 2,808 megawatts. There are over 51 wind powered generation units with an aggregate installed capacity of approximately 78 megawatts. The Company’s subsidiaries include Compania Electrica San Isidro S.A. (San Isidro), Compania Electrica Tarapaca S.A. (Celta), Empresa Electrica Pehuenche S.A. (Pehuenche) and GasAtacama S.A (GasAtacama). It is controlled by Enel Chile SA.
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