Head to Head Analysis: WEC Energy Group (WEC) vs. Entergy Corporation (ETR)
WEC Energy Group (NYSE: WEC) and Entergy Corporation (NYSE:ETR) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.
This is a breakdown of recent ratings and target prices for WEC Energy Group and Entergy Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WEC Energy Group||1||5||1||0||2.00|
WEC Energy Group presently has a consensus target price of $62.50, suggesting a potential downside of 5.47%. Entergy Corporation has a consensus target price of $77.55, suggesting a potential downside of 2.11%. Given Entergy Corporation’s higher probable upside, analysts plainly believe Entergy Corporation is more favorable than WEC Energy Group.
Insider and Institutional Ownership
70.8% of WEC Energy Group shares are held by institutional investors. Comparatively, 84.1% of Entergy Corporation shares are held by institutional investors. 1.0% of WEC Energy Group shares are held by insiders. Comparatively, 0.2% of Entergy Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares WEC Energy Group and Entergy Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WEC Energy Group||$7.61 billion||2.74||$2.51 billion||$3.04||21.75|
|Entergy Corporation||$10.98 billion||1.30||$3.56 billion||($4.99)||-15.88|
Entergy Corporation has higher revenue and earnings than WEC Energy Group. Entergy Corporation is trading at a lower price-to-earnings ratio than WEC Energy Group, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
WEC Energy Group has a beta of 0.12, suggesting that its stock price is 88% less volatile than the S&P 500. Comparatively, Entergy Corporation has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.
WEC Energy Group pays an annual dividend of $2.08 per share and has a dividend yield of 3.1%. Entergy Corporation pays an annual dividend of $3.48 per share and has a dividend yield of 4.4%. WEC Energy Group pays out 68.4% of its earnings in the form of a dividend. Entergy Corporation pays out -69.7% 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. WEC Energy Group has raised its dividend for 2 consecutive years and Entergy Corporation has raised its dividend for 6 consecutive years. Entergy Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares WEC Energy Group and Entergy Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WEC Energy Group||12.22%||8.74%||2.64%|
Entergy Corporation beats WEC Energy Group on 9 of the 15 factors compared between the two stocks.
About WEC Energy Group
WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.
About Entergy Corporation
Entergy Corporation is a holding company. The Company is an integrated energy company engaged in electric power production and retail electric distribution operations. The Company operates through two business segments: Utility and Entergy Wholesale Commodities. The Utility segment includes the generation, transmission, distribution and sale of electric power to retail and wholesale customers in areas of Arkansas, Mississippi, Texas and Louisiana, including the City of New Orleans and operates a natural gas distribution business. The Entergy Wholesale Commodities segment includes the ownership, operation and decommissioning of nuclear power plants located in the northern United States and the sale of the electric power produced by its operating plants to wholesale customers. As of December 31, 2016, the Company owned and operated power plants with over 30,000 megawatts of aggregate electric generating capacity, including approximately 10,000 megawatts of nuclear-fueled capacity.
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