Head-To-Head Review: Edison International (EIX) & Eversource Energy (ES)
Edison International (NYSE: EIX) and Eversource Energy (NYSE:ES) are both large-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.
Institutional & Insider Ownership
79.4% of Edison International shares are held by institutional investors. Comparatively, 71.6% of Eversource Energy shares are held by institutional investors. 0.4% of Edison International shares are held by insiders. Comparatively, 0.5% of Eversource Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of recent recommendations for Edison International and Eversource Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Edison International currently has a consensus price target of $78.92, suggesting a potential upside of 33.89%. Eversource Energy has a consensus price target of $62.85, suggesting a potential upside of 10.22%. Given Edison International’s stronger consensus rating and higher possible upside, equities analysts clearly believe Edison International is more favorable than Eversource Energy.
Edison International pays an annual dividend of $2.42 per share and has a dividend yield of 4.1%. Eversource Energy pays an annual dividend of $1.90 per share and has a dividend yield of 3.3%. Edison International pays out 54.6% of its earnings in the form of a dividend. Eversource Energy pays out 61.7% 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. Edison International has increased its dividend for 2 consecutive years and Eversource Energy has increased its dividend for 13 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Edison International and Eversource Energy’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Edison International||$11.87 billion||1.62||$1.43 billion||$4.43||13.30|
|Eversource Energy||$7.64 billion||2.37||$942.30 million||$3.08||18.51|
Edison International has higher revenue and earnings than Eversource Energy. Edison International is trading at a lower price-to-earnings ratio than Eversource Energy, indicating that it is currently the more affordable of the two stocks.
This table compares Edison International and Eversource Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Edison International has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.
Edison International beats Eversource Energy on 11 of the 17 factors compared between the two stocks.
About Edison International
Edison International is the holding company of Southern California Edison Company (SCE). As of December 31, 2016, SCE, a public utility, was primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. The Company is also the parent company of Edison Energy Group, Inc. (Edison Energy Group), a holding company for subsidiaries engaged in pursuing competitive business opportunities across energy services and distributed solar to commercial and industrial customers. SCE’s projects include West of Devers, Mesa Substation, Alberhill System, Riverside Transmission Reliability, Eldorado-Lugo-Mohave Upgrade, Tehachapi and Coolwater-Lugo. As of December 31, 2016, the West of Devers Project consisted of upgrading and reconfiguring approximately 48 miles of existing 220 kilovolt (kV) transmission lines between the Devers, El Casco, Vista and San Bernardino substations.
About Eversource Energy
Eversource Energy is a utility holding company engaged in the energy delivery business. The Company operates through three segments: electric distribution, electric transmission and natural gas distribution. The Company’s electric distribution segment consists of the distribution businesses, which are engaged in the distribution of electricity to retail customers in Connecticut, Massachusetts, and New Hampshire and the regulated electric generation businesses. Its electric transmission segment owns and maintains transmission facilities that are part of an interstate power transmission grid over which electricity is transmitted throughout New England. Its electric distribution segment consists of the distribution businesses of The Connecticut Light and Power Company (CL&P), NSTAR Electric Company (NSTAR Electric), Public Service Company of New Hampshire (PSNH) and Western Massachusetts Electric Company (WMECO). It also provides water utility services through its subsidiary, Aquarion.
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