Dominion Energy (NYSE: D) and NorthWestern Corporation (NYSE:NWE) are both mid-cap utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares Dominion Energy and NorthWestern Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dominion Energy 17.21% 13.32% 3.16%
NorthWestern Corporation 12.44% 9.41% 2.89%

Dividends

Dominion Energy pays an annual dividend of $3.02 per share and has a dividend yield of 3.7%. NorthWestern Corporation pays an annual dividend of $2.10 per share and has a dividend yield of 3.4%. Dominion Energy pays out 89.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NorthWestern Corporation pays out 63.4% of its earnings in the form of a dividend. Dominion Energy has raised its dividend for 8 consecutive years and NorthWestern Corporation has raised its dividend for 8 consecutive years.

Earnings and Valuation

This table compares Dominion Energy and NorthWestern Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Dominion Energy $11.73 billion 4.50 $2.12 billion $3.39 24.18
NorthWestern Corporation $1.26 billion 2.40 $164.17 million $3.31 18.77

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

Volatility & Risk

Dominion Energy has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, NorthWestern Corporation has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Dominion Energy and NorthWestern Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dominion Energy 0 12 3 0 2.20
NorthWestern Corporation 3 1 0 0 1.25

Dominion Energy presently has a consensus target price of $80.11, indicating a potential downside of 1.55%. NorthWestern Corporation has a consensus target price of $54.67, indicating a potential downside of 12.01%. Given Dominion Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Dominion Energy is more favorable than NorthWestern Corporation.

Institutional & Insider Ownership

64.4% of Dominion Energy shares are held by institutional investors. Comparatively, 94.7% of NorthWestern Corporation shares are held by institutional investors. 0.4% of Dominion Energy shares are held by company insiders. Comparatively, 1.3% of NorthWestern Corporation shares are held by company 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.

Summary

Dominion Energy beats NorthWestern Corporation on 12 of the 16 factors compared between the two stocks.

About Dominion Energy

Dominion Energy, Inc., formerly Dominion Resources, Inc., is a producer and transporter of energy. Dominion is focused on its investment in regulated electric generation, transmission and distribution and regulated natural gas transmission and distribution infrastructure. It operates through three segments: Dominion Virginia Power operating segment (DVP), Dominion Generation, Dominion Energy, and Corporate and Other. The DVP segment includes regulated electric distribution and regulated electric transmission. The Dominion Generation segment includes regulated electric fleet and merchant electric fleet. The Dominion Energy segment includes gas transmission and storage, gas gathering and processing, liquefied natural gas import and storage, and nonregulated retail energy marketing. As of December 31, 2016, Dominion served utility and retail energy customers, and operated an underground natural gas storage system with approximately one trillion cubic feet of storage capacity.

About NorthWestern Corporation

NorthWestern Corporation, doing business as North-Western Energy, provides electricity and natural gas. The Company’s segments are Electric operations, Natural gas operations and All other. As of December 31, 2016, the Company provided electricity and natural gas to approximately 709,600 customers in Montana, South Dakota and Nebraska. It generates and distributes electricity in South Dakota; distributes natural gas in South Dakota and Nebraska, and generates and distributes electricity and distributes natural gas in Montana. Its regulated electric utility business in Montana includes generation, transmission and distribution. As of December 31, 2016, it provided retail electricity in 110 communities in South Dakota. Its regulated natural gas utility business in Montana includes production, storage, transmission and distribution. As of December 31, 2016, it provided natural gas to approximately 88,500 customers in 60 South Dakota communities and four Nebraska communities.

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