Financial Contrast: Southern (NYSE:SO) and Emera (OTCMKTS:EMRAF)

Southern (NYSE:SO) and Emera (OTCMKTS:EMRAF) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Profitability

This table compares Southern and Emera’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern	15.43%	12.93%	3.28%
Emera	N/A	N/A	N/A

Dividends

Southern pays an annual dividend of $3.04 per share and has a dividend yield of 3.5%. Emera pays an annual dividend of $1.45 per share and has a dividend yield of 3.2%. Southern pays out 72.9% of its earnings in the form of a dividend. Emera pays out 73.8% 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. Southern has increased its dividend for 25 consecutive years. Southern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

64.1% of Southern shares are owned by institutional investors. Comparatively, 23.7% of Emera shares are owned by institutional investors. 0.2% of Southern shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Southern and Emera”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern	$30.18 billion	3.35	$4.34 billion	$4.17	21.08
Emera	N/A	N/A	N/A	$1.97	23.11

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Southern and Emera, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern	2	11	7	0	2.25
Emera	0	0	0	0	0.00

Southern presently has a consensus price target of $100.09, suggesting a potential upside of 13.87%. Given Southern’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Southern is more favorable than Emera.

Summary

Southern beats Emera on 13 of the 14 factors compared between the two stocks.

About Southern

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations. In addition, it owns and operates nuclear, coal, hydro, cogeneration, solar, wind, battery storage, and fuel cell facilities. Further, the constructs, operates, and maintains approximately 77,900 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.9 million electric and gas utility customers. Further, it develops distributed energy and resilience solutions; deploys microgrids for commercial, industrial, governmental, and utility customers; and offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.

About Emera

Emera Incorporated, through its subsidiaries, engages in the generation, transmission, and distribution of electricity to various customers. The company operates through Florida Electric Utility, Canadian Electric Utilities, Other Electric Utilities, Gas Utilities and Infrastructure, and Other segments. It generates electricity through natural gas, solar, hydroelectricity, coal, and biomass power plants. The company is also involved in the purchase, transmission, distribution, and sale of natural gas; and the provision of energy marketing, trading, and other energy asset management services. In addition, it transports re-gasified liquefied natural gas from Saint John, New Brunswick to consumers in the northeastern United States through its 145-kilometer pipeline. As of December 31, 2023, the company’s electric utilities served approximately 840,000 customers in West Central Florida; 549,000 customers in Nova Scotia; 134,000 customers in the island of Barbados; 19,000 customers in the Grand Bahama Island; and gas utilities and infrastructure served approximately 490,000 customers across Florida and 540,000 customers in New Mexico. The company was incorporated in 1998 and is headquartered in Halifax, Canada.