Pepco Holdings (NYSE: POM) and Pampa Energia (NYSE:PAM) are both mid-cap electric utilities – nec companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

44.1% of Pampa Energia shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Pepco Holdings and Pampa Energia, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pepco Holdings 0 0 0 0 N/A
Pampa Energia 0 1 1 0 2.50

Pampa Energia has a consensus target price of $72.00, suggesting a potential upside of 7.41%. Given Pampa Energia’s higher possible upside, analysts clearly believe Pampa Energia is more favorable than Pepco Holdings.

Valuation and Earnings

This table compares Pepco Holdings and Pampa Energia’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Pepco Holdings N/A N/A N/A $1.25 21.56
Pampa Energia $2.13 billion 2.32 -$740,000.00 $1.44 46.55

Pepco Holdings has higher revenue, but lower earnings than Pampa Energia. Pepco Holdings is trading at a lower price-to-earnings ratio than Pampa Energia, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pepco Holdings and Pampa Energia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pepco Holdings 10.52% 11.08% 2.95%
Pampa Energia 3.37% 11.62% 2.17%

Summary

Pampa Energia beats Pepco Holdings on 6 of the 8 factors compared between the two stocks.

Pepco Holdings Company Profile

Pepco Holdings LLC, formerly Pepco Holdings, Inc., is a holding company. The Company, through its utility subsidiaries, is engaged in the transmission, distribution and default supply of electricity, and the distribution and supply of natural gas. The Company’s segments include Power Delivery, Pepco Energy Services, and Corporate and Other. The Company’s subsidiaries include Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE). Pepco is engaged in the transmission, distribution and default supply of electricity. DPL is involved in the transmission, distribution and default supply of electricity, and distribution and supply of natural gas. ACE is engaged in the transmission, distribution and default supply of electricity. The Company’s subsidiaries own and operate a network of wires, substations and other equipment that are classified as transmission facilities, distribution facilities or common facilities.

Pampa Energia Company Profile

Pampa Energia S.A. is an integrated electricity company. The Company, through its subsidiaries, is engaged in the generation, transmission and distribution of electricity in Argentina. Its segments include generation, transmission, distribution, oil and gas, and holding and others. Its generation segment includes a direct and indirect equity interest in Central Piedra Buena S.A., Central Termica Guemes S.A., Central Termica Loma de la Lata S.A. and Pampa Comercializadora S.A, among others, and investments in companies in the electricity generation sector. Its transmission segment includes an indirect equity interest through Compania Inversora en Transmision Electrica Citelec S.A. Its distribution segment includes an indirect equity interest in Electricidad Argentina S.A. and Empresa Distribuidora y Comercializadora Norte S.A. Its Oil and gas segment includes a direct interest in Petrolera Pampa S.A. Its holding and others segment includes financial investment operations, among others.

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