El Paso Electric (EE) vs. Cleco Corporate Holdings (CNL) Financial Survey
El Paso Electric (NYSE: EE) and Cleco Corporate Holdings (NYSE:CNL) are both mid-cap electric utilities – nec companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.
Risk and Volatility
El Paso Electric has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Cleco Corporate Holdings has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.
This table compares El Paso Electric and Cleco Corporate Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|El Paso Electric||10.13%||8.44%||2.67%|
|Cleco Corporate Holdings||8.24%||5.05%||1.60%|
El Paso Electric pays an annual dividend of $1.34 per share and has a dividend yield of 2.2%. Cleco Corporate Holdings pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. El Paso Electric pays out 56.1% of its earnings in the form of a dividend. Cleco Corporate Holdings pays out 72.7% 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. El Paso Electric has raised its dividend for 5 consecutive years and Cleco Corporate Holdings has raised its dividend for 7 consecutive years. Cleco Corporate Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
97.9% of El Paso Electric shares are held by institutional investors. 1.3% of El Paso Electric 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.
This is a breakdown of recent ratings and recommmendations for El Paso Electric and Cleco Corporate Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|El Paso Electric||1||2||1||0||2.00|
|Cleco Corporate Holdings||0||0||0||0||N/A|
El Paso Electric presently has a consensus price target of $55.50, indicating a potential downside of 7.81%. Given El Paso Electric’s higher probable upside, equities analysts clearly believe El Paso Electric is more favorable than Cleco Corporate Holdings.
Valuation & Earnings
This table compares El Paso Electric and Cleco Corporate Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|El Paso Electric||$886.94 million||2.75||$96.76 million||$2.39||25.19|
|Cleco Corporate Holdings||N/A||N/A||N/A||$2.20||25.17|
El Paso Electric has higher revenue and earnings than Cleco Corporate Holdings. Cleco Corporate Holdings is trading at a lower price-to-earnings ratio than El Paso Electric, indicating that it is currently the more affordable of the two stocks.
El Paso Electric beats Cleco Corporate Holdings on 10 of the 13 factors compared between the two stocks.
El Paso Electric Company Profile
El Paso Electric Company is a public utility company. As of December 31, 2016, the Company was engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in west Texas and southern New Mexico. As of December 31, 2016, the Company owned or had ownership interests in several electrical generating facilities providing it with a generating capability of approximately 2,080 megawatts (MW). The Company’s energy sources consists of nuclear fuel, natural gas, coal, purchased power and generated by Company-owned solar photovoltaic panels. As of December 31, 2016, the Company had power purchase agreements for 107 MW from solar photovoltaic generation facilities. As of December 31, 2016, the Company served approximately 411,100 residential, commercial, industrial, public authority and wholesale customers. The Company distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico.
Cleco Corporate Holdings Company Profile
Cleco Corporate Holdings LLC, formerly Cleco Corporation, is a public utility holding company. The Company’s segments include Cleco Power and Other. Cleco Power is a regulated electric utility company that owns over 10 generating units with a total nameplate capacity of approximately 3,330 megawatts (MW) and serves approximately 287,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana and Mississippi. The Company, through its subsidiaries, owns one transmission substation in Louisiana and one transmission substation in Mississippi. Cleco Power is engaged in the generation, transmission, distribution and sale of electricity within Louisiana. It owns natural gas pipelines and interconnections at all of its generating facilities, which allow it to access various natural gas supply markets and maintain an economical fuel supply for its customers. The Company holds investments in its subsidiary, Cleco Power LLC (Cleco Power).
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