Consolidated Edison (NYSE:ED) & NextEra Energy (NYSE:NEE) Financial Comparison

NextEra Energy (NYSE:NEE) and Consolidated Edison (NYSE:ED) are both large-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Institutional & Insider Ownership

78.7% of NextEra Energy shares are held by institutional investors. Comparatively, 66.3% of Consolidated Edison shares are held by institutional investors. 0.2% of NextEra Energy shares are held by insiders. Comparatively, 0.2% of Consolidated Edison shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for NextEra Energy and Consolidated Edison, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NextEra Energy	0	5	15	2	2.86
Consolidated Edison	6	7	2	0	1.73

NextEra Energy currently has a consensus price target of $99.90, suggesting a potential upside of 12.81%. Consolidated Edison has a consensus price target of $108.07, suggesting a potential downside of 4.33%. Given NextEra Energy’s stronger consensus rating and higher possible upside, research analysts plainly believe NextEra Energy is more favorable than Consolidated Edison.

Earnings & Valuation

This table compares NextEra Energy and Consolidated Edison”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NextEra Energy	$27.41 billion	6.74	$6.83 billion	$3.93	22.53
Consolidated Edison	$17.21 billion	2.42	$2.02 billion	$5.94	19.02

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

Dividends

NextEra Energy pays an annual dividend of $2.49 per share and has a dividend yield of 2.8%. Consolidated Edison pays an annual dividend of $3.55 per share and has a dividend yield of 3.1%. NextEra Energy pays out 63.4% of its earnings in the form of a dividend. Consolidated Edison pays out 59.8% 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. NextEra Energy has increased its dividend for 31 consecutive years and Consolidated Edison has increased its dividend for 52 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NextEra Energy	29.36%	12.25%	3.78%
Consolidated Edison	12.52%	8.33%	2.78%

Volatility and Risk

NextEra Energy has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Consolidated Edison has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Summary

NextEra Energy beats Consolidated Edison on 14 of the 18 factors compared between the two stocks.

About NextEra Energy

NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear,natural gas, and other clean energy. It also develops, constructs, and operates long-term contracted assets that consists of clean energy solutions, such as renewable generation facilities, battery storage projects, and electric transmission facilities; sells energy commodities; and owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets. The company had approximately 33,276 megawatts of net generating capacity; approximately 90,000 circuit miles of transmission and distribution lines; and 883 substations. It serves approximately 12 million people through approximately 5.9 million customer accounts in the east and lower west coasts of Florida. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in 2010. NextEra Energy, Inc. was founded in 1925 and is headquartered in Juno Beach, Florida.

About Consolidated Edison

Consolidated Edison, Inc., through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States. It offers electric services to approximately 3.7 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,530 customers in parts of Manhattan. The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey; and gas to approximately 0.2 million customers in southeastern New York. In addition, it operates 545 circuit miles of transmission lines; 15 transmission substations; 63 distribution substations; 90,051 in-service line transformers; 3,788 pole miles of overhead distribution lines; and 2,314 miles of underground distribution lines, as well as 4,363 miles of mains and 380,870 service lines for natural gas distribution. Further, the company invests in electric and gas transmission projects. It primarily sells electricity to industrial, commercial, residential, and government customers. Consolidated Edison, Inc. was founded in 1823 and is based in New York, New York.