Financial Comparison: Pacific Gas & Electric Co. (PCG) versus Otter Tail Corporation (OTTR)
Pacific Gas & Electric Co. (NYSE: PCG) and Otter Tail Corporation (NASDAQ:OTTR) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.
Risk and Volatility
Pacific Gas & Electric Co. has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, Otter Tail Corporation has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.
Insider and Institutional Ownership
80.9% of Pacific Gas & Electric Co. shares are owned by institutional investors. Comparatively, 40.6% of Otter Tail Corporation shares are owned by institutional investors. 0.2% of Pacific Gas & Electric Co. shares are owned by company insiders. Comparatively, 1.4% of Otter Tail Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Pacific Gas & Electric Co. pays an annual dividend of $2.12 per share and has a dividend yield of 3.1%. Otter Tail Corporation pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Pacific Gas & Electric Co. pays out 52.3% of its earnings in the form of a dividend. Otter Tail Corporation pays out 74.4% 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. Pacific Gas & Electric Co. is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and target prices for Pacific Gas & Electric Co. and Otter Tail Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pacific Gas & Electric Co.||0||3||6||0||2.67|
|Otter Tail Corporation||0||1||1||0||2.50|
Pacific Gas & Electric Co. presently has a consensus price target of $69.50, suggesting a potential upside of 0.65%. Otter Tail Corporation has a consensus price target of $41.00, suggesting a potential downside of 4.54%. Given Pacific Gas & Electric Co.’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Pacific Gas & Electric Co. is more favorable than Otter Tail Corporation.
This table compares Pacific Gas & Electric Co. and Otter Tail Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pacific Gas & Electric Co.||11.48%||11.63%||3.11%|
|Otter Tail Corporation||8.35%||10.14%||3.57%|
Earnings & Valuation
This table compares Pacific Gas & Electric Co. and Otter Tail Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pacific Gas & Electric Co.||$18.04 billion||1.96||$6.53 billion||$4.05||17.05|
|Otter Tail Corporation||$820.02 million||2.07||$191.22 million||$1.72||24.97|
Pacific Gas & Electric Co. has higher revenue and earnings than Otter Tail Corporation. Pacific Gas & Electric Co. is trading at a lower price-to-earnings ratio than Otter Tail Corporation, indicating that it is currently the more affordable of the two stocks.
Pacific Gas & Electric Co. beats Otter Tail Corporation on 11 of the 16 factors compared between the two stocks.
About Pacific Gas & Electric Co.
PG&E Corporation is a holding company. The Company’s primary operating subsidiary is Pacific Gas and Electric Company (the Utility), which operates in northern and central California. The Utility is engaged in the sale and delivery of electricity and natural gas to customers. The Utility generates electricity and provides electricity transmission and distribution services throughout its service territory in northern and central California to residential, commercial, industrial, and agricultural customers. The Utility provides bundled services (electricity, transmission and distribution services) to various customers in its service territory. As of December 31, 2016, the Utility owned approximately 18,400 circuit miles of interconnected transmission lines operating at voltages ranging from 60 kilovolt to 500 kilovolt. As of December 31, 2016, the Utility also operated 92 electric transmission substations with a capacity of approximately 64,600 megavolt ampere (MVA).
About Otter Tail Corporation
Otter Tail Corporation is a holding company. The Company operates through three segments: Electric, Manufacturing and Plastics. The Electric segment includes the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota by Otter Tail Power Company (OTP). The Manufacturing segment consists of businesses in manufacturing activities, such as contract machining, metal parts stamping, fabrication and painting, and production of material and handling trays and horticultural containers. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States. The Plastics segment consists of businesses producing polyvinyl chloride (PVC) pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the upper Midwest and Southwest regions of the United States. The Company’s manufacturing and plastic pipe businesses are owned by its subsidiary, Varistar Corporation.
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