Portland General Electric (NYSE: POR) and ITC Holdings Corp. (NYSE:ITC) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Portland General Electric and ITC Holdings Corp., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Portland General Electric 4 3 0 0 1.43
ITC Holdings Corp. 0 1 0 0 2.00

Portland General Electric currently has a consensus target price of $42.00, indicating a potential downside of 10.56%. Given Portland General Electric’s higher possible upside, analysts plainly believe Portland General Electric is more favorable than ITC Holdings Corp..

Valuation and Earnings

This table compares Portland General Electric and ITC Holdings Corp.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Portland General Electric $1.99 billion 2.10 $687.00 million $2.24 20.96
ITC Holdings Corp. N/A N/A N/A $1.54 29.55

Portland General Electric has higher revenue and earnings than ITC Holdings Corp.. Portland General Electric 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.

Dividends

Portland General Electric pays an annual dividend of $1.36 per share and has a dividend yield of 2.9%. ITC Holdings Corp. pays an annual dividend of $0.86 per share and has a dividend yield of 1.9%. Portland General Electric pays out 60.7% of its earnings in the form of a dividend. ITC Holdings Corp. pays out 55.8% 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. Portland General Electric has increased its dividend for 5 consecutive years and ITC Holdings Corp. has increased its dividend for 11 consecutive years.

Profitability

This table compares Portland General Electric and ITC Holdings Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Portland General Electric 10.06% 8.48% 2.64%
ITC Holdings Corp. 26.73% 16.53% 3.82%

Institutional & Insider Ownership

93.2% of Portland General Electric shares are held by institutional investors. Comparatively, 84.2% of ITC Holdings Corp. shares are held by institutional investors. 0.6% of Portland General Electric shares are held by company insiders. Comparatively, 3.2% of ITC Holdings Corp. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

ITC Holdings Corp. beats Portland General Electric on 7 of the 12 factors compared between the two stocks.

Portland General Electric Company Profile

Portland General Electric Company is an electric utility that is engaged in the wholesale purchase, transmission, distribution and retail sale of electricity in the State of Oregon. Its service area allocation of approximately 4,000 square miles is located entirely within Oregon and includes approximately 51 incorporated cities, of which Portland and Salem. It has five natural gas-fired generating facilities, which include Port Westward Unit 1 (PW1), Port Westward Unit 2 (PW2), Beaver natural gas-fired generating plant (Beaver), Coyote Springs Unit 1 (Coyote Springs) and Carty natural gas-fired generating plant (Carty). As of December 31, 2016, the Company owned and operated two wind farms, Biglow Canyon Wind Farm (Biglow Canyon) and Tucannon River Wind Farm (Tucannon River). The Company’s hydroelectric projects consist of Pelton/Round Butte on the Deschutes River near Madras, Oregon, four plants on the Clackamas River, and one on the Willamette River.

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.

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