Analyzing Consolidated Edison (ED) & ITC (ITC)

Consolidated Edison (NYSE: ED) and ITC (NYSE:ITC) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Consolidated Edison and ITC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consolidated Edison 4 5 1 0 1.70
ITC 0 0 0 0 N/A

Consolidated Edison presently has a consensus price target of $80.61, suggesting a potential upside of 4.65%.

Institutional and Insider Ownership

56.1% of Consolidated Edison shares are held by institutional investors. Comparatively, 84.2% of ITC shares are held by institutional investors. 0.2% of Consolidated Edison shares are held by company insiders. Comparatively, 3.2% of ITC shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Consolidated Edison and ITC’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Consolidated Edison $12.08 billion 1.98 $1.25 billion $3.99 19.31
ITC N/A N/A N/A $1.48 N/A

Consolidated Edison has higher revenue and earnings than ITC. ITC is trading at a lower price-to-earnings ratio than Consolidated Edison, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Consolidated Edison and ITC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consolidated Edison 10.42% 8.42% 2.52%
ITC 27.42% 16.62% 3.79%

Dividends

Consolidated Edison pays an annual dividend of $2.76 per share and has a dividend yield of 3.6%. ITC pays an annual dividend of $0.86 per share. Consolidated Edison pays out 69.2% of its earnings in the form of a dividend. ITC pays out 58.1% 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. Consolidated Edison has increased its dividend for 6 consecutive years and ITC has increased its dividend for 43 consecutive years.

Summary

ITC beats Consolidated Edison on 8 of the 12 factors compared between the two stocks.

Consolidated Edison Company Profile

Consolidated Edison, Inc. (Con Edison) is a holding company. The Company operates through its subsidiaries, which include Consolidated Edison Company of New York, Inc. (CECONY), Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. (the Clean Energy Businesses) and Con Edison Transmission, Inc. (Con Edison Transmission). CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. CECONY provides electricity, natural gas and steam to customers in New York City and Westchester County. O&R’s principal business operations are its regulated electric and gas delivery businesses. The Clean Energy Businesses develop, own and operate renewable and energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. Con Edison Transmission, through its subsidiaries, invests in electric transmission facilities and gas pipeline and storage facilities.

ITC Company Profile

ITC Holdings Corp. (ITC Holdings) is a holding company. The Company is engaged in owning, operating, maintaining and investing in transmission infrastructure. The Company’s business consists primarily of the electric transmission operations of its Regulated Operating Subsidiaries. Its Regulated Operating Subsidiaries include International Transmission Company (ITCTransmission), Michigan Electric Transmission Company, LLC (METC), ITC Midwest LLC (ITC Midwest). The operations performed by its Regulated Operating Subsidiaries fall into the various categories, such as asset planning; engineering, design and construction; maintenance, and real time operations. Its customers include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers. It owns and operates high-voltage systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma.

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