Comparing Eversource Energy (ES) and FirstEnergy Corporation (FE)
Eversource Energy (NYSE: ES) and FirstEnergy Corporation (NYSE:FE) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.
Earnings & Valuation
This table compares Eversource Energy and FirstEnergy Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Eversource Energy||$7.68 billion||2.56||$2.63 billion||$3.09||20.11|
|FirstEnergy Corporation||$13.76 billion||1.04||$3.96 billion||($11.70)||-2.75|
FirstEnergy Corporation has higher revenue and earnings than Eversource Energy. FirstEnergy Corporation is trading at a lower price-to-earnings ratio than Eversource Energy, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for Eversource Energy and FirstEnergy Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Eversource Energy presently has a consensus price target of $63.79, indicating a potential upside of 2.66%. FirstEnergy Corporation has a consensus price target of $34.30, indicating a potential upside of 6.74%. Given FirstEnergy Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe FirstEnergy Corporation is more favorable than Eversource Energy.
This table compares Eversource Energy and FirstEnergy Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Eversource Energy has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, FirstEnergy Corporation has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500.
Institutional & Insider Ownership
71.9% of Eversource Energy shares are held by institutional investors. Comparatively, 80.0% of FirstEnergy Corporation shares are held by institutional investors. 0.5% of Eversource Energy shares are held by company insiders. Comparatively, 0.3% of FirstEnergy Corporation shares are held 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.
Eversource Energy pays an annual dividend of $1.90 per share and has a dividend yield of 3.1%. FirstEnergy Corporation pays an annual dividend of $1.44 per share and has a dividend yield of 4.5%. Eversource Energy pays out 61.5% of its earnings in the form of a dividend. FirstEnergy Corporation pays out -12.3% 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. FirstEnergy Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
FirstEnergy Corporation beats Eversource Energy on 9 of the 15 factors compared between the two stocks.
About Eversource Energy
Eversource Energy is a utility holding company engaged in the energy delivery business. The Company operates through three segments: electric distribution, electric transmission and natural gas distribution. The Company’s electric distribution segment consists of the distribution businesses, which are engaged in the distribution of electricity to retail customers in Connecticut, eastern Massachusetts, New Hampshire and western Massachusetts, and the regulated electric generation businesses. Its electric transmission segment owns and maintains transmission facilities that are part of an interstate power transmission grid over which electricity is transmitted throughout New England. Its electric distribution segment consists of the distribution businesses of The Connecticut Light and Power Company (CL&P), NSTAR Electric Company (NSTAR Electric), Public Service Company of New Hampshire (PSNH) and Western Massachusetts Electric Company (WMECO).
About FirstEnergy Corporation
FirstEnergy Corp. is a holding company. The Company is engaged in holding, directly or indirectly, all of the outstanding equity of its principal subsidiaries. Its segments include Regulated Distribution, Regulated Transmission, Competitive Energy Services (CES) and Corporate/Other. As of December 31, 2016, the Regulated Distribution segment distributed electricity through the Company’s 10 utility operating companies, serving approximately six million customers, and purchased power for its provider of last resort (POLR), standard offer service (SOS), standard offer service (SSO) and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. The Regulated Transmission segment transmits electricity through transmission facilities owned and operated by American Transmission Systems, Incorporated (ATSI) and Trans-Allegheny Interstate Line Company (TrAIL). The CES segment primarily supplies electricity to end use customers through retail and wholesale arrangements.
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