Head-To-Head Contrast: Fortis (FTS) versus Its Peers

Fortis (NYSE:FTS) is one of 103 public companies in the “Electric Utilities” industry, but how does it weigh in compared to its competitors? We will compare Fortis to similar businesses based on the strength of its earnings, risk, analyst recommendations, dividends, institutional ownership, profitability and valuation.

Insider & Institutional Ownership

57.8% of Fortis shares are owned by institutional investors. Comparatively, 60.0% of shares of all “Electric Utilities” companies are owned by institutional investors. 6.2% of shares of all “Electric Utilities” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Fortis and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fortis	0	6	2	0	2.25
Fortis Competitors	1426	6544	5520	140	2.32

Fortis presently has a consensus target price of $66.67, suggesting a potential upside of 12.68%. As a group, “Electric Utilities” companies have a potential upside of 3.89%. Given Fortis’ higher possible upside, analysts clearly believe Fortis is more favorable than its competitors.

Earnings and Valuation

This table compares Fortis and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Fortis	$8.71 billion	$1.29 billion	23.29
Fortis Competitors	$13.64 billion	$1.54 billion	20.01

Fortis’ competitors have higher revenue and earnings than Fortis. Fortis is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Fortis and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fortis	14.66%	7.37%	2.40%
Fortis Competitors	13.89%	9.77%	3.23%

Risk and Volatility

Fortis has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, Fortis’ competitors have a beta of -2.37, indicating that their average stock price is 337% less volatile than the S&P 500.

Dividends

Fortis pays an annual dividend of $1.82 per share and has a dividend yield of 3.1%. Fortis pays out 71.7% of its earnings in the form of a dividend. As a group, “Electric Utilities” companies pay a dividend yield of 3.1% and pay out 63.8% of their earnings in the form of a dividend. Fortis has raised its dividend for 5 consecutive years. Fortis lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Fortis competitors beat Fortis on 11 of the 15 factors compared.

Fortis Company Profile

Fortis Inc. is a Canadian utility company that owns and operates regulated electric and natural gas businesses. Its activities include electricity generation, transmission and distribution, as well as natural gas distribution and energy infrastructure services. The company serves customers across Canada, the United States and the Caribbean through a group of regional utilities. Its operations include electric utilities and natural gas businesses serving communities in provinces such as British Columbia and Newfoundland and Labrador, as well as U.S. states including Arizona and New York.