ITC Holdings Corp. (ITC) versus Eversource Energy (ES) Critical Analysis
ITC Holdings Corp. (NYSE: ITC) and Eversource Energy (NYSE:ES) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitabiliy, analyst recommendations, valuation, earnings and institutional ownership.
This table compares ITC Holdings Corp. and Eversource Energy’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%|
ITC Holdings Corp. pays an annual dividend of $0.86 per share and has a dividend yield of 1.9%. Eversource Energy pays an annual dividend of $1.90 per share and has a dividend yield of 3.1%. ITC Holdings Corp. pays out 55.8% of its earnings in the form of a dividend. Eversource Energy pays out 63.1% 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. Eversource Energy has increased its dividend for 5 consecutive years. Eversource Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares ITC Holdings Corp. and Eversource Energy’s gross 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|
|Eversource Energy||$7.69 billion||2.57||$2.58 billion||$3.01||20.68|
Eversource Energy has higher revenue and earnings than ITC Holdings Corp.. Eversource Energy 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.
Insider & Institutional Ownership
84.2% of ITC Holdings Corp. shares are owned by institutional investors. Comparatively, 71.6% of Eversource Energy shares are owned by institutional investors. 3.2% of ITC Holdings Corp. shares are owned by insiders. Comparatively, 0.5% of Eversource Energy shares are owned by 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 is a breakdown of current recommendations for ITC Holdings Corp. and Eversource Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ITC Holdings Corp.||0||1||0||0||2.00|
Eversource Energy has a consensus price target of $61.88, indicating a potential downside of 0.60%. Given Eversource Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Eversource Energy is more favorable than ITC Holdings Corp..
Eversource Energy beats ITC Holdings Corp. on 7 of the 13 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.
Eversource Energy Company Profile
Eversource Energy is a utility holding company engaged in the energy delivery business. The Company operates through three segments: electric distribution, electric transmission and natural gas distribution. The Company’s electric distribution segment consists of the distribution businesses, which are engaged in the distribution of electricity to retail customers in Connecticut, eastern Massachusetts, New Hampshire and western Massachusetts, and the regulated electric generation businesses. Its electric transmission segment owns and maintains transmission facilities that are part of an interstate power transmission grid over which electricity is transmitted throughout New England. Its electric distribution segment consists of the distribution businesses of The Connecticut Light and Power Company (CL&P), NSTAR Electric Company (NSTAR Electric), Public Service Company of New Hampshire (PSNH) and Western Massachusetts Electric Company (WMECO).
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