Financial Contrast: E.On (OTCMKTS:EONGY) versus SSE (OTC:SSEZF)

SSE (OTC:SSEZF) and E.On (OTCMKTS:EONGY) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for SSE and E.On, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SSE	0	0	0	0	N/A
E.On	0	0	3	0	3.00

Earnings and Valuation

This table compares SSE and E.On’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SSE	N/A	N/A	N/A	$0.21	99.79
E.On	$101.39 billion	N/A	$559.55 million	($0.30)	-44.07

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

Dividends

SSE pays an annual dividend of $0.87 per share and has a dividend yield of 4.2%. E.On pays an annual dividend of $0.41 per share and has a dividend yield of 3.1%. SSE pays out 419.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. E.On pays out -136.7% of its earnings in the form of a dividend.

Institutional & Insider Ownership

40.4% of SSE shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares SSE and E.On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SSE	N/A	N/A	N/A
E.On	0.55%	10.83%	1.99%

Summary

E.On beats SSE on 6 of the 10 factors compared between the two stocks.

About SSE

SSE plc engages in the generation, transmission, distribution, and supply of electricity. It generates electricity from water, gas, coal, oil, and multi fuel. The company distributes electricity to approximately 3.8 million homes and businesses across the north of the central belt of Scotland and central southern England; and owns, operates, and develops high voltage electricity transmission system in the north of Scotland and remote islands. It also produces, stores, distributes, and supplies gas. In addition, it engages in the electricity and utility contracting, telecommunications, energy trading, insurance, and property holding businesses, as well as provides maintenance services. The company was formerly known as Scottish and Southern Energy plc and changed its name to SSE plc in September 2011. SSE plc was incorporated in 1989 and is based in Perth, the United Kingdom.

About E.On

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, rest of Europe, and internationally. It operates through two segments, Energy Networks and Customer Solutions. The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services. The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities. Additionally, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties. The company was founded in 1923 and is headquartered in Essen, Germany.