Critical Analysis: SCANA (SCG) vs. NorthWestern (NWE)
SCANA (NYSE: SCG) and NorthWestern (NYSE:NWE) are both mid-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.
This table compares SCANA and NorthWestern’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
SCANA pays an annual dividend of $2.45 per share and has a dividend yield of 5.4%. NorthWestern pays an annual dividend of $2.10 per share and has a dividend yield of 3.3%. SCANA pays out 77.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NorthWestern pays out 63.4% of its earnings in the form of a dividend. SCANA has raised its dividend for 17 consecutive years and NorthWestern has raised its dividend for 8 consecutive years. SCANA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current ratings and recommmendations for SCANA and NorthWestern, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
SCANA currently has a consensus target price of $59.21, suggesting a potential upside of 29.35%. NorthWestern has a consensus target price of $54.67, suggesting a potential downside of 13.61%. Given SCANA’s stronger consensus rating and higher probable upside, research analysts plainly believe SCANA is more favorable than NorthWestern.
Valuation and Earnings
This table compares SCANA and NorthWestern’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SCANA||$4.23 billion||1.54||$595.00 million||$3.16||14.49|
|NorthWestern||$1.26 billion||2.45||$164.17 million||$3.31||19.12|
SCANA has higher revenue and earnings than NorthWestern. SCANA is trading at a lower price-to-earnings ratio than NorthWestern, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
66.8% of SCANA shares are owned by institutional investors. Comparatively, 93.7% of NorthWestern shares are owned by institutional investors. 0.4% of SCANA shares are owned by insiders. Comparatively, 1.3% of NorthWestern shares 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.
Volatility and Risk
SCANA has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, NorthWestern has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.
SCANA beats NorthWestern on 9 of the 17 factors compared between the two stocks.
SCANA Company Profile
SCANA Corporation is a holding company. The Company, through its subsidiaries, is engaged in the generation, transmission, distribution and sale of electricity in South Carolina. The Company operates through segments, including Electric Operations, Gas Distribution, Gas Marketing and All Other. The Company is engaged in the purchase, transmission and sale of natural gas in North Carolina and South Carolina. The Electric Operations segment generates, transmits and distributes electricity. The Company’s regulated businesses include subsidiaries, such as South Carolina Electric & Gas Company (SCE&G), South Carolina Fuel Company, Inc. (Fuel Company), South Carolina Generating Company, Inc. (GENCO) and Public Service Company of North Carolina, Incorporated (PSNC Energy). The Company’s nonregulated businesses include subsidiaries, such as SCANA Energy Marketing, Inc. (SCANA Energy), ServiceCare, Inc., SCANA Services, Inc. and SCANA Corporate Security Services, Inc.
NorthWestern Company Profile
NorthWestern Corporation, doing business as North-Western Energy, provides electricity and natural gas. The Company’s segments are Electric operations, Natural gas operations and All other. As of December 31, 2016, the Company provided electricity and natural gas to approximately 709,600 customers in Montana, South Dakota and Nebraska. It generates and distributes electricity in South Dakota; distributes natural gas in South Dakota and Nebraska, and generates and distributes electricity and distributes natural gas in Montana. Its regulated electric utility business in Montana includes generation, transmission and distribution. As of December 31, 2016, it provided retail electricity in 110 communities in South Dakota. Its regulated natural gas utility business in Montana includes production, storage, transmission and distribution. As of December 31, 2016, it provided natural gas to approximately 88,500 customers in 60 South Dakota communities and four Nebraska communities.
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