Contrasting Eversource Energy (NYSE:ES) and National Grid Transco (NYSE:NGG)

National Grid Transco (NYSE:NGG) and Eversource Energy (NYSE:ES) are both large-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

National Grid Transco has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Profitability

This table compares National Grid Transco and Eversource Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Grid Transco	N/A	N/A	N/A
Eversource Energy	10.22%	11.06%	2.83%

Institutional and Insider Ownership

4.7% of National Grid Transco shares are owned by institutional investors. Comparatively, 80.0% of Eversource Energy shares are owned by institutional investors. 0.4% of Eversource Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for National Grid Transco and Eversource Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Grid Transco	1	4	4	1	2.50
Eversource Energy	3	6	2	0	1.91

National Grid Transco currently has a consensus price target of $83.80, suggesting a potential downside of 7.45%. Eversource Energy has a consensus price target of $71.50, suggesting a potential upside of 1.81%. Given Eversource Energy’s higher possible upside, analysts plainly believe Eversource Energy is more favorable than National Grid Transco.

Earnings and Valuation

This table compares National Grid Transco and Eversource Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Grid Transco	$23.61 billion	3.81	$3.70 billion	N/A	N/A
Eversource Energy	$11.90 billion	2.21	$811.65 million	$3.65	19.24

National Grid Transco has higher revenue and earnings than Eversource Energy.

Dividends

National Grid Transco pays an annual dividend of $2.11 per share and has a dividend yield of 2.3%. Eversource Energy pays an annual dividend of $3.01 per share and has a dividend yield of 4.3%. Eversource Energy pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eversource Energy has raised its dividend for 2 consecutive years. Eversource Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About National Grid Transco

National Grid plc transmits and distributes electricity and gas. It operates through UK Electricity Transmission, UK Electricity Distribution, UK Electricity System Operator, New England, New York, National Grid Ventures, and Other segments. The UK Electricity Transmission segment provides electricity transmission and construction work services in England and Wales. The UK Electricity Distribution segment offers electricity distribution services in Midlands, and South West of England and South Wales. The UK Electricity System Operator segment provides balancing services for supply and demand of electricity on Great Britain’s electricity transmission system; and acts as an agent on behalf of transmission operators. The New England segment offers electricity and gas distribution, and electricity transmission services in New England. The New York segment provides electricity and gas distribution, and electricity transmission services in New York. The National Grid Ventures segment provides transmission services through electricity interconnectors and LNG importation at the Isle of Grain, as well as sale of renewables projects. The Other segment engages in the leasing and sale of commercial property, as well as insurance activities in the United Kingdom. The company was founded in 1990 and is headquartered in London, the United Kingdom.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.