Exelon Corporation (NYSE: EXC) and Pacific Gas & Electric Co. (NYSE:PCG) are both large-cap electric utilities – nec companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Profitability

This table compares Exelon Corporation and Pacific Gas & Electric Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exelon Corporation 6.59% 8.19% 2.02%
Pacific Gas & Electric Co. 12.59% 11.94% 3.21%

Dividends

Exelon Corporation pays an annual dividend of $1.31 per share and has a dividend yield of 3.2%. Pacific Gas & Electric Co. pays an annual dividend of $2.12 per share and has a dividend yield of 3.8%. Exelon Corporation pays out 58.7% of its earnings in the form of a dividend. Pacific Gas & Electric Co. pays out 48.7% 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. Pacific Gas & Electric Co. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Exelon Corporation and Pacific Gas & Electric Co.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Exelon Corporation $31.36 billion 1.26 $1.13 billion $2.23 18.51
Pacific Gas & Electric Co. $17.67 billion 1.64 $1.41 billion $4.35 12.94

Pacific Gas & Electric Co. has higher revenue, but lower earnings than Exelon Corporation. Pacific Gas & Electric Co. is trading at a lower price-to-earnings ratio than Exelon Corporation, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

77.4% of Exelon Corporation shares are owned by institutional investors. Comparatively, 81.2% of Pacific Gas & Electric Co. shares are owned by institutional investors. 0.7% of Exelon Corporation shares are owned by insiders. Comparatively, 0.2% of Pacific Gas & Electric Co. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Exelon Corporation and Pacific Gas & Electric Co., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exelon Corporation 1 3 11 0 2.67
Pacific Gas & Electric Co. 0 4 9 0 2.69

Exelon Corporation currently has a consensus target price of $40.88, indicating a potential downside of 0.93%. Pacific Gas & Electric Co. has a consensus target price of $68.17, indicating a potential upside of 21.08%. Given Pacific Gas & Electric Co.’s stronger consensus rating and higher probable upside, analysts clearly believe Pacific Gas & Electric Co. is more favorable than Exelon Corporation.

Volatility & Risk

Exelon Corporation has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, Pacific Gas & Electric Co. has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Summary

Pacific Gas & Electric Co. beats Exelon Corporation on 11 of the 16 factors compared between the two stocks.

Exelon Corporation Company Profile

Exelon Corporation is a utility services holding company. The Company, through its subsidiary, Exelon Generation Company, LLC (Generation), is engaged in the energy generation business. The Company, through its subsidiaries, Commonwealth Edison Company (ComEd), PECO Energy Company (PECO), Baltimore Gas and Electric Company (BGE), Pepco Holdings LLC (PHI), Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE), is engaged in the energy delivery businesses. It operates through 12 segments: Generation’s six segments: Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions; ComEd; PECO; BGE, and PHI’s three utility segments: Pepco, DPL and ACE. Generation’s integrated business consists of the generation, physical delivery and marketing of power across geographical regions through its customer-facing business, Constellation, which sells electricity and natural gas to both wholesale and retail customers.

Pacific Gas & Electric Co. Company Profile

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).

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