Comparing Fortis (NYSE:FTS) and Evergy (NASDAQ:EVRG)

Fortis (NYSE:FTS) and Evergy (NASDAQ:EVRG) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares Fortis and Evergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fortis	14.24%	7.24%	2.38%
Evergy	14.35%	8.79%	2.68%

Analyst Recommendations

This is a summary of recent ratings for Fortis and Evergy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fortis	0	5	6	0	2.55
Evergy	0	3	8	1	2.83

Fortis presently has a consensus target price of $67.00, suggesting a potential upside of 17.06%. Evergy has a consensus target price of $89.30, suggesting a potential upside of 8.10%. Given Fortis’ higher probable upside, equities analysts clearly believe Fortis is more favorable than Evergy.

Dividends

Fortis pays an annual dividend of $1.88 per share and has a dividend yield of 3.3%. Evergy pays an annual dividend of $2.78 per share and has a dividend yield of 3.4%. Fortis pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Evergy pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fortis has raised its dividend for 5 consecutive years and Evergy has raised its dividend for 20 consecutive years. Evergy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Fortis has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Evergy has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Valuation and Earnings

This table compares Fortis and Evergy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fortis	$8.71 billion	3.35	$1.29 billion	$2.44	23.46
Evergy	$5.96 billion	3.19	$855.60 million	$3.67	22.51

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

Institutional & Insider Ownership

57.8% of Fortis shares are owned by institutional investors. Comparatively, 87.2% of Evergy shares are owned by institutional investors. 1.5% of Evergy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Evergy beats Fortis on 13 of the 18 factors compared between the two stocks.

About Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

About Evergy

Evergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.