Empire District Electric (NYSE: EDE) and Avangrid (NYSE:AGR) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitabiliy, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

65.9% of Empire District Electric shares are owned by institutional investors. Comparatively, 13.4% of Avangrid shares are owned by institutional investors. 0.7% of Empire District Electric shares are owned by company insiders. Comparatively, 0.3% of Avangrid shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Empire District Electric and Avangrid’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Empire District Electric 15.69% 13.50% 4.46%
Avangrid 11.25% 4.52% 2.20%

Analyst Recommendations

This is a summary of recent ratings and price targets for Empire District Electric and Avangrid, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Empire District Electric 3 4 0 0 1.57
Avangrid 1 1 3 0 2.40

Empire District Electric currently has a consensus price target of $19.57, indicating a potential downside of 42.59%. Avangrid has a consensus price target of $44.25, indicating a potential downside of 2.06%. Given Avangrid’s stronger consensus rating and higher possible upside, analysts clearly believe Avangrid is more favorable than Empire District Electric.

Dividends

Empire District Electric pays an annual dividend of $1.04 per share and has a dividend yield of 3.1%. Avangrid pays an annual dividend of $1.73 per share and has a dividend yield of 3.8%. Empire District Electric pays out 75.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avangrid pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Empire District Electric has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500. Comparatively, Avangrid has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Valuation and Earnings

This table compares Empire District Electric and Avangrid’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Empire District Electric N/A N/A N/A $1.38 24.70
Avangrid $6.11 billion 2.29 $2.05 billion $2.18 20.72

Avangrid has higher revenue and earnings than Empire District Electric. Avangrid is trading at a lower price-to-earnings ratio than Empire District Electric, indicating that it is currently the more affordable of the two stocks.

Summary

Avangrid beats Empire District Electric on 7 of the 13 factors compared between the two stocks.

Empire District Electric Company Profile

The Empire District Electric Company is a regulated utility company. The Company is engaged in the generation, purchase, transmission, distribution and sale of electricity. It provides services with in Missouri, Kansas, Oklahoma and Arkansas. The Company operates its businesses in three segments: electric, gas and other. As part of its electric segment, the Company provides water service to over three towns in Missouri. The Company through its subsidiary, The Empire District Gas Company (EDG), is engaged in the distribution of natural gas in Missouri. The Company’s other segment consists of fiber optics business. It supplies electric service at retail to approximately 120 incorporated communities and to various unincorporated areas, and at wholesale to over four municipally owned distribution systems. Its gas operations serve customers in northwest, north central and west central Missouri. It serves a group of customers, including residential, commercial and industrial customers.

Avangrid Company Profile

Avangrid, Inc. is an energy and utility company. The Company operates through three segments: Networks, Renewables and Gas. The Networks segment includes all the energy transmission and distribution activities, and any other regulated activity originating in New York and Maine, and regulated electric distribution, electric transmission and gas distribution activities originating in Connecticut and Massachusetts. The Renewables segment owns, develops, constructs and/or operates electricity generation, including renewable and thermal generators, and associated transmission facilities. The Renewables segment includes activities relating to renewable energy, mainly wind energy generation and trading related with such activities. The Gas segment operates a natural gas storage and natural gas trading business through its subsidiaries, Enstor, Inc. and Enstor Energy Services, LLC.

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