Critical Analysis: Pampa Energia (PAM) versus Edison International (EIX)
Pampa Energia (NYSE: PAM) and Edison International (NYSE:EIX) are both mid-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.
This table compares Pampa Energia and Edison International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Edison International pays an annual dividend of $2.42 per share and has a dividend yield of 3.9%. Pampa Energia does not pay a dividend. Edison International pays out 55.3% of its earnings in the form of a dividend. Pampa Energia has increased its dividend for 13 consecutive years.
Valuation & Earnings
This table compares Pampa Energia and Edison International’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pampa Energia||$2.13 billion||2.44||-$740,000.00||$2.99||23.58|
|Edison International||$11.87 billion||1.69||$1.43 billion||$4.38||14.02|
Edison International has higher revenue and earnings than Pampa Energia. Edison International is trading at a lower price-to-earnings ratio than Pampa Energia, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Pampa Energia has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Edison International has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.
Insider & Institutional Ownership
44.2% of Pampa Energia shares are owned by institutional investors. Comparatively, 81.1% of Edison International shares are owned by institutional investors. 0.4% of Edison International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for Pampa Energia and Edison International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Pampa Energia presently has a consensus price target of $72.00, indicating a potential upside of 2.14%. Edison International has a consensus price target of $80.31, indicating a potential upside of 30.75%. Given Edison International’s higher possible upside, analysts clearly believe Edison International is more favorable than Pampa Energia.
Edison International beats Pampa Energia on 9 of the 17 factors compared between the two stocks.
Pampa Energia Company Profile
Pampa Energia S.A. is an integrated electricity company. The Company, through its subsidiaries, is engaged in the generation, transmission and distribution of electricity in Argentina. Its segments include generation, transmission, distribution, oil and gas, and holding and others. Its generation segment includes a direct and indirect equity interest in Central Piedra Buena S.A., Central Termica Guemes S.A., Central Termica Loma de la Lata S.A. and Pampa Comercializadora S.A, among others, and investments in companies in the electricity generation sector. Its transmission segment includes an indirect equity interest through Compania Inversora en Transmision Electrica Citelec S.A. Its distribution segment includes an indirect equity interest in Electricidad Argentina S.A. and Empresa Distribuidora y Comercializadora Norte S.A. Its Oil and gas segment includes a direct interest in Petrolera Pampa S.A. Its holding and others segment includes financial investment operations, among others.
Edison International Company Profile
Edison International is the holding company of Southern California Edison Company (SCE). As of December 31, 2016, SCE, a public utility, was primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. The Company is also the parent company of Edison Energy Group, Inc. (Edison Energy Group), a holding company for subsidiaries engaged in pursuing competitive business opportunities across energy services and distributed solar to commercial and industrial customers. SCE’s projects include West of Devers, Mesa Substation, Alberhill System, Riverside Transmission Reliability, Eldorado-Lugo-Mohave Upgrade, Tehachapi and Coolwater-Lugo. As of December 31, 2016, the West of Devers Project consisted of upgrading and reconfiguring approximately 48 miles of existing 220 kilovolt (kV) transmission lines between the Devers, El Casco, Vista and San Bernardino substations.
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