PPL Corporation (NYSE: PPL) and Sempra Energy (NYSE:SRE) are both large-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Volatility & Risk

PPL Corporation has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Valuation and Earnings

This table compares PPL Corporation and Sempra Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PPL Corporation $7.40 billion 3.47 $4.04 billion $2.39 15.67
Sempra Energy $10.97 billion 2.61 $3.71 billion $6.75 16.87

PPL Corporation has higher revenue, but lower earnings than Sempra Energy. PPL Corporation is trading at a lower price-to-earnings ratio than Sempra Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for PPL Corporation and Sempra Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PPL Corporation 0 5 2 0 2.29
Sempra Energy 0 2 3 0 2.60

PPL Corporation presently has a consensus target price of $38.36, suggesting a potential upside of 2.39%. Sempra Energy has a consensus target price of $121.60, suggesting a potential upside of 6.79%. Given Sempra Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Sempra Energy is more favorable than PPL Corporation.

Dividends

PPL Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.2%. Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 2.9%. PPL Corporation pays out 66.1% of its earnings in the form of a dividend. Sempra Energy pays out 48.7% 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. PPL Corporation has raised its dividend for 5 consecutive years and Sempra Energy has raised its dividend for 6 consecutive years.

Insider and Institutional Ownership

71.0% of PPL Corporation shares are held by institutional investors. Comparatively, 80.8% of Sempra Energy shares are held by institutional investors. 0.4% of PPL Corporation shares are held by company insiders. Comparatively, 0.2% of Sempra Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares PPL Corporation and Sempra Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PPL Corporation 22.08% 15.96% 4.16%
Sempra Energy 15.51% 9.11% 2.84%

Summary

Sempra Energy beats PPL Corporation on 10 of the 17 factors compared between the two stocks.

PPL Corporation Company Profile

PPL Corporation (PPL) is a utility holding company. Through its subsidiaries, PPL delivers electricity to customers in the United Kingdom, Pennsylvania, Kentucky, Virginia and Tennessee; delivers natural gas to customers in Kentucky, and generates electricity from power plants in Kentucky. PPL operates through U.K. Regulated Segment, Kentucky Regulated Segment and Pennsylvania Regulated Segment. The U.K. Regulated Segment consists of PPL Global, which includes PPL WPD Limited’s (WPD) regulated electricity distribution operations, the results of hedging the translation of WPD’s earnings from British pound sterling into United States dollars, and certain costs, such as the United States income taxes, administrative costs and allocated financing costs. Kentucky Regulated segment consists of the operations of Louisville Gas and Electric Company (LG&E) and KU Energy LLC (LKE). The Pennsylvania Regulated segment consists of PPL Electric Utilities Corporation (PPL Electric).

Sempra Energy Company Profile

Sempra Energy is a holding company. The Company’s principal operating units are Sempra Utilities, which includes its San Diego Gas & Electric Company (SDG&E), Southern California Gas Company (SoCalGas) and Sempra South American Utilities segments, and Sempra Infrastructure, which includes its Sempra Mexico, Sempra Renewables and Sempra LNG & Midstream segments. As of December 31, 2016, SDG&E’s service area covered 4,100 square miles. Sempra South American Utilities operates Chilquinta Energia, which serves customers in the region of Valparaiso in central Chile. As of December 31, 2016, SoCalGas had natural gas franchises with the 12 counties and the 223 cities in its service territory. Sempra LNG & Midstream owns land in Simpson County, Mississippi Hub. Sempra LNG & Midstream owns land in Port Arthur, Texas. Sempra Renewables has operations, investments or development projects in the various United States markets.

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