Head-To-Head Analysis: Pacific Gas & Electric (NYSE:PCG) vs. Entergy (NYSE:ETR)

Pacific Gas & Electric (NYSE:PCG) and Entergy (NYSE:ETR) are both large-cap utilities companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.

Dividends

Pacific Gas & Electric pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Entergy pays an annual dividend of $2.40 per share and has a dividend yield of 2.6%. Pacific Gas & Electric pays out 9.2% of its earnings in the form of a dividend. Entergy pays out 59.9% 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. Pacific Gas & Electric has raised its dividend for 1 consecutive years and Entergy has raised its dividend for 10 consecutive years. Entergy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Pacific Gas & Electric and Entergy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pacific Gas & Electric	$24.45 billion	1.71	$2.51 billion	$1.09	14.33
Entergy	$11.88 billion	3.52	$1.06 billion	$4.01	23.33

Pacific Gas & Electric has higher revenue and earnings than Entergy. Pacific Gas & Electric is trading at a lower price-to-earnings ratio than Entergy, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Pacific Gas & Electric has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Entergy has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Pacific Gas & Electric and Entergy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pacific Gas & Electric	0	6	6	0	2.50
Entergy	0	5	11	0	2.69

Pacific Gas & Electric currently has a consensus target price of $20.25, suggesting a potential upside of 29.60%. Entergy has a consensus target price of $89.80, suggesting a potential downside of 4.00%. Given Pacific Gas & Electric’s higher probable upside, equities research analysts clearly believe Pacific Gas & Electric is more favorable than Entergy.

Profitability

This table compares Pacific Gas & Electric and Entergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pacific Gas & Electric	9.95%	10.13%	2.17%
Entergy	14.35%	11.52%	2.68%

Insider and Institutional Ownership

78.6% of Pacific Gas & Electric shares are held by institutional investors. Comparatively, 88.1% of Entergy shares are held by institutional investors. 0.1% of Pacific Gas & Electric shares are held by company insiders. Comparatively, 0.4% of Entergy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Entergy beats Pacific Gas & Electric on 13 of the 17 factors compared between the two stocks.

About Pacific Gas & Electric

PG&E Corp. operates as a holding company, which engages in generation, transmission, and distribution of electricity and natural gas to customers. It specializes in energy, utility, power, gas, electricity, solar and sustainability. The company was founded in 1995 and is headquartered in Oakland, CA.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and retail distribution of electricity in the United States. It generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, including the City of New Orleans; and distributes natural gas. It also engages in the ownership of interests in non-nuclear power plants that sell electric power to wholesale customers, as well as provides decommissioning services to other nuclear power plant owners. It generates electricity through gas, nuclear, coal, hydro, and solar power sources. The company sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company’s power plants have approximately 24,000 megawatts of electric generating capacity. It delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1913 and is headquartered in New Orleans, Louisiana.