Spire (NYSE: SR) and Vectren Corporation (NYSE:VVC) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Institutional & Insider Ownership

78.6% of Spire shares are held by institutional investors. Comparatively, 64.5% of Vectren Corporation shares are held by institutional investors. 3.1% of Spire shares are held by company insiders. Comparatively, 0.1% of Vectren Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Spire and Vectren Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spire 9.12% 8.77% 2.63%
Vectren Corporation 8.66% 12.65% 3.90%

Dividends

Spire pays an annual dividend of $2.10 per share and has a dividend yield of 2.8%. Vectren Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.8%. Spire pays out 60.2% of its earnings in the form of a dividend. Vectren Corporation pays out 62.2% 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. Vectren Corporation has increased its dividend for 57 consecutive years. Spire is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Spire has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Vectren Corporation has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Spire and Vectren Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spire 1 4 1 0 2.00
Vectren Corporation 0 0 3 0 3.00

Spire presently has a consensus target price of $70.80, indicating a potential downside of 6.66%. Vectren Corporation has a consensus target price of $66.00, indicating a potential upside of 8.36%. Given Vectren Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Vectren Corporation is more favorable than Spire.

Earnings and Valuation

This table compares Spire and Vectren Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Spire $1.76 billion 2.08 $462.00 million $3.49 21.73
Vectren Corporation $2.59 billion 1.95 $668.60 million $2.70 22.56

Vectren Corporation has higher revenue and earnings than Spire. Spire is trading at a lower price-to-earnings ratio than Vectren Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Vectren Corporation beats Spire on 10 of the 17 factors compared between the two stocks.

About Spire

Spire Inc., formerly The Laclede Group, Inc., is engaged to transform its business and pursue growth by growing its gas utility business through prudent investment in infrastructure upgrades and organic growth initiatives; acquire and integrate gas utilities; modernize its gas assets, and invest in innovation. The Company has two business segments, which include gas utility and gas marketing. The gas utility segment includes the regulated operations of Laclede Gas Company (Laclede Gas), Alabama Gas Corporation (Alagasco) and EnergySouth, Inc. (EnergySouth). The gas marketing segment includes Laclede Energy Resources, Inc. (LER), a subsidiary engaged in the marketing of natural gas and related activities on a non-regulated basis. Laclede Gas is engaged in the purchase, retail distribution and sale of natural gas, serving residential, commercial and industrial customers, through Missouri Gas Energy (MGE), Kansas City and western Missouri.

About Vectren Corporation

Vectren Corporation (Vectren) is an energy holding company. The Company segregates its operations into groups, including the Utility Group, the Nonutility Group, and Corporate and Other. The Company’s subsidiary, Vectren Utility Holdings, Inc. (Utility Holdings or VUHI), serves as the intermediate holding company for three public utilities: Indiana Gas Company, Inc. (Indiana Gas), Southern Indiana Gas and Electric Company (SIGECO) and Vectren Energy Delivery of Ohio, Inc. (VEDO). The Company, through Vectren Enterprises Inc. (Enterprises), is involved in non-utility activities in two primary business areas: Infrastructure Services and Energy Services. Infrastructure Services provides underground pipeline construction and repair services. Energy Services provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects.

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