Pinnacle West Capital (NYSE:PNW) and SSE PLC/S (OTCMKTS:SSEZY) are both large-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.
Risk and Volatility
Pinnacle West Capital has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500. Comparatively, SSE PLC/S has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.
This table compares Pinnacle West Capital and SSE PLC/S’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pinnacle West Capital||13.71%||9.68%||2.92%|
Insider & Institutional Ownership
82.4% of Pinnacle West Capital shares are owned by institutional investors. Comparatively, 0.2% of SSE PLC/S shares are owned by institutional investors. 0.5% of Pinnacle West Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a summary of current ratings and price targets for Pinnacle West Capital and SSE PLC/S, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pinnacle West Capital||0||7||4||0||2.36|
Pinnacle West Capital currently has a consensus target price of $86.00, suggesting a potential downside of 5.27%. Given Pinnacle West Capital’s higher possible upside, equities analysts plainly believe Pinnacle West Capital is more favorable than SSE PLC/S.
Pinnacle West Capital pays an annual dividend of $2.95 per share and has a dividend yield of 3.2%. SSE PLC/S pays an annual dividend of $1.70 per share and has a dividend yield of 12.3%. Pinnacle West Capital pays out 67.8% of its earnings in the form of a dividend. SSE PLC/S pays out 105.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pinnacle West Capital has raised its dividend for 6 consecutive years.
Earnings & Valuation
This table compares Pinnacle West Capital and SSE PLC/S’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pinnacle West Capital||$3.57 billion||2.85||$488.45 million||$4.35||20.87|
|SSE PLC/S||$41.41 billion||0.34||$1.09 billion||$1.61||8.60|
SSE PLC/S has higher revenue and earnings than Pinnacle West Capital. SSE PLC/S is trading at a lower price-to-earnings ratio than Pinnacle West Capital, indicating that it is currently the more affordable of the two stocks.
Pinnacle West Capital beats SSE PLC/S on 12 of the 17 factors compared between the two stocks.
About Pinnacle West Capital
Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. It generates, transmits, and distributes electricity using coal, nuclear, gas, oil, and solar resources. The company serves approximately 1.2 million homes and businesses. It owns or leases approximately 6,236 megawatts of regulated generation capacity. The company was founded in 1920 and is headquartered in Phoenix, Arizona.
About SSE PLC/S
SSE plc engages in the generation, transmission, distribution, and supply of electricity. The company operates through three segments: Wholesale, Networks, and Retail. It generates electricity from gas, oil, coal, water, and wind. The company transmits and distributes electricity to approximately 3.7 million homes and businesses across the north of the central belt of Scotland and also central southern England; owns and maintains 132 kilovolts (KV), 275kV, and 400kV electricity transmission network; and manages 130,000 kilometers of overhead lines and underground cables, 106,000 substations, and approximately 100 subsea cables. It also produces, stores, distributes, and supplies gas; and offers other energy-related services. In addition, it engages in electricity and utility contracting, telecommunications, energy trading, insurance, and property holding businesses, as well as provision of corporate and maintenance services. The company was formerly known as Scottish and Southern Energy plc and changed its name to SSE plc in September 2011. SSE plc was incorporated in 1989 and is based in Perth, the United Kingdom.
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