Head to Head Analysis: Edison International (NYSE:EIX) versus National Grid Transco (NYSE:NGG)

Edison International (NYSE:EIX) and National Grid Transco (NYSE:NGG) are both large-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Valuation and Earnings

This table compares Edison International and National Grid Transco”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Edison International	$19.32 billion	1.41	$4.70 billion	$9.21	7.67
National Grid Transco	$23.61 billion	3.66	$3.70 billion	N/A	N/A

Edison International has higher earnings, but lower revenue than National Grid Transco.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Edison International and National Grid Transco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Edison International	3	6	5	0	2.14
National Grid Transco	2	6	3	0	2.09

Edison International currently has a consensus price target of $72.82, indicating a potential upside of 3.08%. National Grid Transco has a consensus price target of $83.80, indicating a potential downside of 3.52%. Given Edison International’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Edison International is more favorable than National Grid Transco.

Institutional & Insider Ownership

89.0% of Edison International shares are held by institutional investors. Comparatively, 4.7% of National Grid Transco shares are held by institutional investors. 1.2% of Edison International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Edison International and National Grid Transco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Edison International	19.27%	14.56%	2.87%
National Grid Transco	N/A	N/A	N/A

Dividends

Edison International pays an annual dividend of $3.51 per share and has a dividend yield of 5.0%. National Grid Transco pays an annual dividend of $2.11 per share and has a dividend yield of 2.4%. Edison International pays out 38.1% of its earnings in the form of a dividend. Edison International has increased its dividend for 23 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Edison International has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, National Grid Transco has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Summary

Edison International beats National Grid Transco on 11 of the 15 factors compared between the two stocks.

About Edison International

Edison International, through its subsidiaries, engages in the generation and distribution of electric power. The company supplies and delivers electricity to approximately 50,000 square mile area of southern California to residential, commercial, industrial, public authorities, agricultural, and other sectors. Its transmission facilities consist of lines ranging from 55 kV to 500 kV and approximately 80 transmission substations; distribution system consists of approximately 38,000 circuit-miles of overhead lines; approximately 31,000 circuit-miles of underground lines; and 730 distribution substations. The company was founded in 1886 and is based in Rosemead, California.

About National Grid Transco

National Grid plc transmits and distributes electricity and gas. It operates through UK Electricity Transmission, UK Electricity Distribution, UK Electricity System Operator, New England, New York, National Grid Ventures, and Other segments. The UK Electricity Transmission segment provides electricity transmission and construction work services in England and Wales. The UK Electricity Distribution segment offers electricity distribution services in Midlands, and South West of England and South Wales. The UK Electricity System Operator segment provides balancing services for supply and demand of electricity on Great Britain’s electricity transmission system; and acts as an agent on behalf of transmission operators. The New England segment offers electricity and gas distribution, and electricity transmission services in New England. The New York segment provides electricity and gas distribution, and electricity transmission services in New York. The National Grid Ventures segment provides transmission services through electricity interconnectors and LNG importation at the Isle of Grain, as well as sale of renewables projects. The Other segment engages in the leasing and sale of commercial property, as well as insurance activities in the United Kingdom. The company was founded in 1990 and is headquartered in London, the United Kingdom.