Reviewing Pepco (POM) and The Competition

Pepco (NYSE: POM) is one of 81 publicly-traded companies in the “Electric Utilities” industry, but how does it contrast to its rivals? We will compare Pepco to related companies based on the strength of its earnings, profitability, dividends, analyst recommendations, institutional ownership, risk and valuation.

Earnings and Valuation

This table compares Pepco and its rivals gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Pepco N/A N/A 21.54
Pepco Competitors $7.66 billion $831.80 million 46.71

Pepco’s rivals have higher revenue and earnings than Pepco. Pepco is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

65.7% of shares of all “Electric Utilities” companies are owned by institutional investors. 2.7% of shares of all “Electric Utilities” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Pepco and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pepco 10.52% 11.08% 2.95%
Pepco Competitors -10.16% 9.39% 2.56%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Pepco and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pepco 0 0 0 0 N/A
Pepco Competitors 532 2931 2374 42 2.33

As a group, “Electric Utilities” companies have a potential upside of 7.17%. Given Pepco’s rivals higher possible upside, analysts clearly believe Pepco has less favorable growth aspects than its rivals.

Dividends

Pepco pays an annual dividend of $1.08 per share and has a dividend yield of 4.0%. Pepco pays out 86.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Electric Utilities” companies pay a dividend yield of 3.1% and pay out 96.9% of their earnings in the form of a dividend. Pepco is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Summary

Pepco beats its rivals on 5 of the 9 factors compared.

About Pepco

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.

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