Spark Energy (NASDAQ: SPKE) and OGE Energy (NYSE:OGE) are both utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility and Risk

Spark Energy has a beta of -1.67, suggesting that its share price is 267% less volatile than the S&P 500. Comparatively, OGE Energy has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Valuation & Earnings

This table compares Spark Energy and OGE Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Spark Energy $546.70 million 0.71 $14.44 million $0.81 13.77
OGE Energy $2.26 billion 2.90 $338.20 million $1.91 17.15

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

Dividends

Spark Energy pays an annual dividend of $0.73 per share and has a dividend yield of 6.5%. OGE Energy pays an annual dividend of $1.33 per share and has a dividend yield of 4.1%. Spark Energy pays out 90.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OGE Energy pays out 69.6% of its earnings in the form of a dividend. Spark Energy has raised its dividend for 11 consecutive years. Spark Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

35.3% of Spark Energy shares are held by institutional investors. Comparatively, 62.2% of OGE Energy shares are held by institutional investors. 66.9% of Spark Energy shares are held by insiders. Comparatively, 0.5% of OGE Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Spark Energy and OGE Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spark Energy 1.84% 10.49% 3.38%
OGE Energy 16.69% 10.92% 3.73%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Spark Energy and OGE Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spark Energy 0 2 4 0 2.67
OGE Energy 1 6 1 0 2.00

Spark Energy currently has a consensus price target of $22.08, indicating a potential upside of 98.06%. OGE Energy has a consensus price target of $36.67, indicating a potential upside of 11.96%. Given Spark Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Spark Energy is more favorable than OGE Energy.

Summary

OGE Energy beats Spark Energy on 11 of the 17 factors compared between the two stocks.

Spark Energy Company Profile

Spark Energy, Inc. is an independent retail energy services company. The Company provides residential and commercial customers across the United States with an alternative choice for their natural gas and electricity. The Company operates through two segments: Retail Natural Gas Segment and Retail Electricity Segment. The Retail Natural Gas segment consists of natural gas sales to, and natural gas transportation and distribution for, residential and commercial customers. It purchases natural gas supply through physical and financial transactions with market counterparts and supplies natural gas to residential and commercial consumers pursuant to fixed-price and variable-price. The Retail Electricity segment consists of electricity sales and transmission to residential and commercial customers. The Company has approximately 774,000 renewable energy credits (RCEs). As of July 5, 2017, the Company operates in 94 utility service territories across 19 states and the District of Columbia.

OGE Energy Company Profile

OGE Energy Corp. (OGE Energy) is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company operates through two segments: electric utility and natural gas midstream operations. The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through Oklahoma Gas and Electric Company (OG&E). OG&E is an electric utility in Oklahoma and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. The natural gas midstream operations segment represents the Company’s investment in Enable Midstream Partners, LP (Enable) through subsidiaries, and ultimately OGE Enogex Holdings LLC (OGE Holdings). Enable’s assets and operations are organized into two segments: gathering and processing, and transportation and storage.

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