Analyzing NorthWestern (NWE) and UNITIL (UTL)
NorthWestern (NYSE: NWE) and UNITIL (NYSE:UTL) are both electric utilities – nec companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.
This is a breakdown of current recommendations for NorthWestern and UNITIL, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Institutional and Insider Ownership
93.6% of NorthWestern shares are owned by institutional investors. Comparatively, 58.2% of UNITIL shares are owned by institutional investors. 1.3% of NorthWestern shares are owned by insiders. Comparatively, 2.5% of UNITIL shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Risk & Volatility
NorthWestern has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, UNITIL has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500.
Earnings & Valuation
This table compares NorthWestern and UNITIL’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NorthWestern||$1.26 billion||2.14||$164.17 million||$3.32||16.69|
|UNITIL||$383.40 million||1.69||$27.10 million||$2.00||22.04|
NorthWestern has higher revenue and earnings than UNITIL. NorthWestern is trading at a lower price-to-earnings ratio than UNITIL, indicating that it is currently the more affordable of the two stocks.
This table compares NorthWestern and UNITIL’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
NorthWestern pays an annual dividend of $2.10 per share and has a dividend yield of 3.8%. UNITIL pays an annual dividend of $1.44 per share and has a dividend yield of 3.3%. NorthWestern pays out 63.3% of its earnings in the form of a dividend. UNITIL pays out 72.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NorthWestern has raised its dividend for 3 consecutive years and UNITIL has raised its dividend for 9 consecutive years. NorthWestern is clearly the better dividend stock, given its higher yield and lower payout ratio.
NorthWestern beats UNITIL on 11 of the 17 factors compared between the two stocks.
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.
Unitil Corporation is a public utility holding company. The Company’s principal business is the local distribution of electricity in the southeastern seacoast and state capital regions of New Hampshire and the greater Fitchburg area of north central Massachusetts and the local distribution of natural gas in southeastern New Hampshire, portions of southern Maine to the Lewiston-Auburn area and in the greater Fitchburg area of north central Massachusetts. Its segments include utility gas operations, utility electric operations and non-regulated. Its operations include natural gas operations; natural gas distribution utility operations; gas transmission pipeline operations; electric distribution utility operations, and non-regulated and other non-utility operations. As of December 31, 2016, it was engaged in the distribution of electricity and natural gas to approximately 184,200 customers throughout its service territories in the states of New Hampshire, Massachusetts and Maine.
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