DTE Energy (NYSE:DTE) versus Canadian Utilities (OTCMKTS:CDUAF) Critical Analysis

Canadian Utilities (OTCMKTS:CDUAF) and DTE Energy (NYSE:DTE) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Institutional and Insider Ownership

9.7% of Canadian Utilities shares are owned by institutional investors. Comparatively, 76.1% of DTE Energy shares are owned by institutional investors. 0.6% of DTE 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.

Dividends

Canadian Utilities pays an annual dividend of $1.04 per share and has a dividend yield of 2.8%. DTE Energy pays an annual dividend of $4.66 per share and has a dividend yield of 3.4%. Canadian Utilities pays out 40.4% of its earnings in the form of a dividend. DTE Energy pays out 73.7% 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. DTE Energy has increased its dividend for 16 consecutive years. DTE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Canadian Utilities and DTE Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Utilities	0	6	0	0	2.00
DTE Energy	0	5	9	1	2.73

DTE Energy has a consensus target price of $158.46, indicating a potential upside of 15.15%. Given DTE Energy’s stronger consensus rating and higher possible upside, analysts clearly believe DTE Energy is more favorable than Canadian Utilities.

Profitability

This table compares Canadian Utilities and DTE Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Utilities	N/A	N/A	N/A
DTE Energy	8.00%	12.19%	2.74%

Valuation & Earnings

This table compares Canadian Utilities and DTE Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Utilities	N/A	N/A	N/A	$2.58	14.68
DTE Energy	$15.81 billion	1.81	$1.46 billion	$6.32	21.77

DTE Energy has higher revenue and earnings than Canadian Utilities. Canadian Utilities is trading at a lower price-to-earnings ratio than DTE Energy, indicating that it is currently the more affordable of the two stocks.

Summary

DTE Energy beats Canadian Utilities on 14 of the 15 factors compared between the two stocks.

About Canadian Utilities

Canadian Utilities Limited, together with its subsidiaries, engages in the electricity, natural gas, renewables, pipelines, liquids, and retail energy businesses in Canada, Australia, and internationally. It operates through ATCO Energy Systems, ATCO EnPower, and Corporate & Other segments. The ATCO Energy Systems segment provides regulated electricity transmission and distribution services in northern and central east Alberta, the Yukon, the Northwest Territories, and the Lloydminster area of Saskatchewan; and integrated natural gas transmission and distribution services in Alberta, the Lloydminster area of Saskatchewan, and Western Australia. It owns and operates approximately 9,100 kilometers of natural gas pipelines, 11 compressor sites, approximately 3,600 receipt and delivery points, and a salt cavern natural gas storage peaking facility located near Fort Saskatchewan, Alberta in Canada. The ATCO EnPower segment provides hydro, solar, wind, and natural gas electricity generation; natural gas storage; industrial water solutions; clean fuels, including hydrogen, carbon capture, and underground storage projects; and related infrastructure development in Alberta, the Yukon, the Northwest Territories, Australia, Ontario, Mexico, and Chile. The Corporate & Other segment retails electricity and natural gas; and provides whole-home solutions. The company was incorporated in 1927 and is headquartered in Calgary, Canada. Canadian Utilities Limited is a subsidiary of ATCO Ltd.

About DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to various residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through coal-fired plants, hydroelectric pumped storage, and nuclear plants, as well as wind and solar assets. This segment owns and operates distribution substations and line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to various residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. Its DTE Vantage segment offers metallurgical and petroleum coke to steel and other industries; and power generation, steam production, chilled water production, and wastewater treatment services, as well as air supplies compressed air to industrial customers. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1849 and is based in Detroit, Michigan.