National Grid Transco (NYSE: NGG) and Empire District Electric (NYSE:EDE) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Institutional & Insider Ownership

5.6% of National Grid Transco shares are held by institutional investors. Comparatively, 65.9% of Empire District Electric shares are held by institutional investors. 0.7% of Empire District Electric 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.

Volatility and Risk

National Grid Transco has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Empire District Electric has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500.

Profitability

This table compares National Grid Transco and Empire District Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Grid Transco N/A N/A N/A
Empire District Electric 15.69% 13.50% 4.46%

Valuation & Earnings

This table compares National Grid Transco and Empire District Electric’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Grid Transco $18.62 billion 2.11 $10.19 billion N/A N/A
Empire District Electric N/A N/A N/A $1.38 24.70

National Grid Transco has higher revenue and earnings than Empire District Electric.

Analyst Ratings

This is a breakdown of current recommendations and price targets for National Grid Transco and Empire District Electric, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Grid Transco 0 6 6 0 2.50
Empire District Electric 0 0 0 0 N/A

National Grid Transco currently has a consensus target price of $69.00, indicating a potential upside of 19.07%. Given National Grid Transco’s higher possible upside, analysts plainly believe National Grid Transco is more favorable than Empire District Electric.

Dividends

National Grid Transco pays an annual dividend of $1.87 per share and has a dividend yield of 3.2%. Empire District Electric pays an annual dividend of $1.04 per share and has a dividend yield of 3.1%. Empire District Electric pays out 75.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

National Grid Transco beats Empire District Electric on 6 of the 11 factors compared between the two stocks.

National Grid Transco Company Profile

National Grid plc is an electricity and gas utility company focused on transmission and distribution activities in electricity and gas in both the United Kingdom and the United States. The Company’s segments include UK Electricity Transmission, which is engaged in high voltage electricity transmission networks in Great Britain; UK Gas Transmission, which is the gas transmission network in Great Britain and United Kingdom liquefied natural gas (LNG) storage activities; UK Gas Distribution, which includes approximately four of the eight regional networks of Great Britain’s gas distribution system, and US Regulated, which includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York, and New England and electricity generation facilities in New York. Its other activities relate to non-regulated businesses and other commercial operations not included within the above segments.

Empire District Electric Company Profile

The Empire District Electric Company is a regulated utility company. The Company is engaged in the generation, purchase, transmission, distribution and sale of electricity. It provides services with in Missouri, Kansas, Oklahoma and Arkansas. The Company operates its businesses in three segments: electric, gas and other. As part of its electric segment, the Company provides water service to over three towns in Missouri. The Company through its subsidiary, The Empire District Gas Company (EDG), is engaged in the distribution of natural gas in Missouri. The Company’s other segment consists of fiber optics business. It supplies electric service at retail to approximately 120 incorporated communities and to various unincorporated areas, and at wholesale to over four municipally owned distribution systems. Its gas operations serve customers in northwest, north central and west central Missouri. It serves a group of customers, including residential, commercial and industrial customers.

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