Critical Review: Public Service Enterprise Group (PEG) and Eversource Energy (ES)
Public Service Enterprise Group (NYSE: PEG) and Eversource Energy (NYSE:ES) are both large-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
This table compares Public Service Enterprise Group and Eversource Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Public Service Enterprise Group||5.73%||11.33%||3.66%|
Public Service Enterprise Group has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500.
This is a summary of recent ratings for Public Service Enterprise Group and Eversource Energy, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Public Service Enterprise Group||0||5||9||0||2.64|
Public Service Enterprise Group currently has a consensus target price of $50.23, indicating a potential downside of 4.15%. Eversource Energy has a consensus target price of $64.06, indicating a potential downside of 2.50%. Given Eversource Energy’s higher probable upside, analysts plainly believe Eversource Energy is more favorable than Public Service Enterprise Group.
Public Service Enterprise Group pays an annual dividend of $1.72 per share and has a dividend yield of 3.3%. Eversource Energy pays an annual dividend of $1.90 per share and has a dividend yield of 2.9%. Public Service Enterprise Group pays out 167.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eversource Energy pays out 61.7% of its earnings in the form of a dividend. Public Service Enterprise Group has raised its dividend for 5 consecutive years. Public Service Enterprise Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
66.8% of Public Service Enterprise Group shares are held by institutional investors. Comparatively, 72.2% of Eversource Energy shares are held by institutional investors. 0.6% of Public Service Enterprise Group shares are held by company insiders. Comparatively, 0.5% of Eversource Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Public Service Enterprise Group and Eversource Energy’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Public Service Enterprise Group||$9.06 billion||2.93||$887.00 million||$1.03||50.87|
|Eversource Energy||$7.64 billion||2.73||$942.30 million||$3.08||21.33|
Eversource Energy has lower revenue, but higher earnings than Public Service Enterprise Group. Eversource Energy is trading at a lower price-to-earnings ratio than Public Service Enterprise Group, indicating that it is currently the more affordable of the two stocks.
Public Service Enterprise Group beats Eversource Energy on 10 of the 17 factors compared between the two stocks.
Public Service Enterprise Group Company Profile
Public Service Enterprise Group Incorporated (PSEG) is a holding company. The Company is an energy company with operations located primarily in the Northeastern and Mid-Atlantic United States. The Company’s segments include Public Service Electric and Gas Company (PSE&G), PSEG Power LLC (Power) and Other. PSEG is engaged in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSE&G is also the provider of last resort for gas and electric commodity service for end users in its service territory. Power is a multi-regional energy supply company that integrates the operations of its merchant nuclear and fossil generating assets with its power marketing businesses through energy sales in energy markets and fuel supply functions primarily in the Northeast and Mid-Atlantic United States through its principal subsidiaries. In addition, Power owns and operates solar generation in various states.
Eversource Energy Company Profile
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).
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