Analyzing ITC Holdings Corp. (ITC) & El Paso Electric Company (EE)
ITC Holdings Corp. (NYSE: ITC) and El Paso Electric Company (NYSE:EE) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitabiliy, dividends, earnings, valuation, institutional ownership and risk.
ITC Holdings Corp. pays an annual dividend of $0.86 per share and has a dividend yield of 1.9%. El Paso Electric Company pays an annual dividend of $1.24 per share and has a dividend yield of 2.3%. ITC Holdings Corp. pays out 55.8% of its earnings in the form of a dividend. El Paso Electric Company pays out 54.6% 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. ITC Holdings Corp. has raised its dividend for 5 consecutive years and El Paso Electric Company has raised its dividend for 5 consecutive years. El Paso Electric Company is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
84.2% of ITC Holdings Corp. shares are owned by institutional investors. Comparatively, 95.0% of El Paso Electric Company shares are owned by institutional investors. 3.2% of ITC Holdings Corp. shares are owned by company insiders. Comparatively, 1.3% of El Paso Electric Company shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares ITC Holdings Corp. and El Paso Electric Company’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ITC Holdings Corp.||26.85%||16.67%||3.86%|
|El Paso Electric Company||-2.33%||-1.51%||-0.47%|
This is a summary of recent ratings and recommmendations for ITC Holdings Corp. and El Paso Electric Company, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ITC Holdings Corp.||0||1||0||0||2.00|
|El Paso Electric Company||0||3||0||0||2.00|
El Paso Electric Company has a consensus price target of $50.00, indicating a potential downside of 8.09%. Given El Paso Electric Company’s higher possible upside, analysts plainly believe El Paso Electric Company is more favorable than ITC Holdings Corp..
Valuation & Earnings
This table compares ITC Holdings Corp. and El Paso Electric Company’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ITC Holdings Corp.||N/A||N/A||N/A||$1.54||29.55|
|El Paso Electric Company||$900.46 million||2.45||$340.22 million||$2.27||23.96|
El Paso Electric Company has higher revenue and earnings than ITC Holdings Corp.. El Paso Electric Company is trading at a lower price-to-earnings ratio than ITC Holdings Corp., indicating that it is currently the more affordable of the two stocks.
El Paso Electric Company beats ITC Holdings Corp. on 6 of the 10 factors compared between the two stocks.
ITC Holdings Corp. Company Profile
ITC Holdings Corp. (ITC Holdings) is a holding company. The Company is engaged in owning, operating, maintaining and investing in transmission infrastructure. The Company’s business consists primarily of the electric transmission operations of its Regulated Operating Subsidiaries. Its Regulated Operating Subsidiaries include International Transmission Company (ITCTransmission), Michigan Electric Transmission Company, LLC (METC), ITC Midwest LLC (ITC Midwest). The operations performed by its Regulated Operating Subsidiaries fall into the various categories, such as asset planning; engineering, design and construction; maintenance, and real time operations. Its customers include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers. It owns and operates high-voltage systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma.
El Paso Electric Company Company Profile
El Paso Electric Company is a public utility company. As of December 31, 2016, the Company was engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in west Texas and southern New Mexico. As of December 31, 2016, the Company owned or had ownership interests in several electrical generating facilities providing it with a generating capability of approximately 2,080 megawatts (MW). The Company’s energy sources consists of nuclear fuel, natural gas, coal, purchased power and generated by Company-owned solar photovoltaic panels. As of December 31, 2016, the Company had power purchase agreements for 107 MW from solar photovoltaic generation facilities. As of December 31, 2016, the Company served approximately 411,100 residential, commercial, industrial, public authority and wholesale customers. The Company distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico.
Receive News & Ratings for ITC Holdings Corp. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for ITC Holdings Corp. and related companies with MarketBeat.com's FREE daily email newsletter.