Analyzing OGE Energy (OGE) and Spark Energy (SPKE)
OGE Energy (NYSE: OGE) and Spark Energy (NASDAQ:SPKE) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.
Volatility & Risk
OGE Energy has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Spark Energy has a beta of -1.67, suggesting that its stock price is 267% less volatile than the S&P 500.
This table compares OGE Energy and Spark Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
62.2% of OGE Energy shares are owned by institutional investors. Comparatively, 35.3% of Spark Energy shares are owned by institutional investors. 0.5% of OGE Energy shares are owned by company insiders. Comparatively, 66.9% of Spark Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This is a summary of current ratings and target prices for OGE Energy and Spark Energy, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
OGE Energy currently has a consensus target price of $36.67, suggesting a potential upside of 12.27%. Spark Energy has a consensus target price of $22.08, suggesting a potential upside of 94.57%. Given Spark Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Spark Energy is more favorable than OGE Energy.
OGE Energy pays an annual dividend of $1.33 per share and has a dividend yield of 4.1%. Spark Energy pays an annual dividend of $0.73 per share and has a dividend yield of 6.4%. OGE Energy pays out 69.6% of its earnings in the form of a dividend. Spark Energy pays out 90.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OGE Energy has raised its dividend for 10 consecutive years.
Earnings & Valuation
This table compares OGE Energy and Spark Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OGE Energy||$2.26 billion||2.89||$338.20 million||$1.91||17.10|
|Spark Energy||$546.70 million||0.72||$14.44 million||$0.81||14.01|
OGE Energy has higher revenue and earnings than Spark Energy. Spark Energy is trading at a lower price-to-earnings ratio than OGE Energy, indicating that it is currently the more affordable of the two stocks.
OGE Energy beats Spark Energy on 12 of the 17 factors compared between the two stocks.
About OGE Energy
OGE Energy Corp. (OGE Energy) is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company operates through two segments: electric utility and natural gas midstream operations. The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through Oklahoma Gas and Electric Company (OG&E). OG&E is an electric utility in Oklahoma and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. The natural gas midstream operations segment represents the Company’s investment in Enable Midstream Partners, LP (Enable) through subsidiaries, and ultimately OGE Enogex Holdings LLC (OGE Holdings). Enable’s assets and operations are organized into two segments: gathering and processing, and transportation and storage.
About Spark Energy
Spark Energy, Inc. is an independent retail energy services company. The Company provides residential and commercial customers across the United States with an alternative choice for their natural gas and electricity. The Company operates through two segments: Retail Natural Gas Segment and Retail Electricity Segment. The Retail Natural Gas segment consists of natural gas sales to, and natural gas transportation and distribution for, residential and commercial customers. It purchases natural gas supply through physical and financial transactions with market counterparts and supplies natural gas to residential and commercial consumers pursuant to fixed-price and variable-price. The Retail Electricity segment consists of electricity sales and transmission to residential and commercial customers. The Company has approximately 774,000 renewable energy credits (RCEs). As of July 5, 2017, the Company operates in 94 utility service territories across 19 states and the District of Columbia.
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