SCANA (SCG) versus El Paso Electric (EE) Financial Contrast
SCANA (NYSE: SCG) and El Paso Electric (NYSE:EE) are both mid-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.
Risk & Volatility
SCANA has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500. Comparatively, El Paso Electric has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.
This table compares SCANA and El Paso Electric’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|El Paso Electric||10.13%||8.39%||2.68%|
Institutional & Insider Ownership
70.3% of SCANA shares are held by institutional investors. Comparatively, 97.4% of El Paso Electric shares are held by institutional investors. 0.4% of SCANA shares are held by company insiders. Comparatively, 1.3% of El Paso Electric shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for SCANA and El Paso Electric, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|El Paso Electric||1||2||0||0||1.67|
SCANA presently has a consensus target price of $54.07, indicating a potential upside of 40.08%. El Paso Electric has a consensus target price of $57.67, indicating a potential upside of 14.06%. Given SCANA’s stronger consensus rating and higher possible upside, analysts plainly believe SCANA is more favorable than El Paso Electric.
Earnings & Valuation
This table compares SCANA and El Paso Electric’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SCANA||$4.41 billion||1.25||-$119.00 million||($0.83)||-46.51|
|El Paso Electric||$916.80 million||2.24||$98.26 million||$2.42||20.89|
El Paso Electric has lower revenue, but higher earnings than SCANA. SCANA is trading at a lower price-to-earnings ratio than El Paso Electric, indicating that it is currently the more affordable of the two stocks.
SCANA pays an annual dividend of $2.45 per share and has a dividend yield of 6.3%. El Paso Electric pays an annual dividend of $1.34 per share and has a dividend yield of 2.7%. SCANA pays out -295.2% of its earnings in the form of a dividend. El Paso Electric pays out 55.4% 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. SCANA has increased its dividend for 6 consecutive years and El Paso Electric has increased its dividend for 18 consecutive years. SCANA is clearly the better dividend stock, given its higher yield and lower payout ratio.
El Paso Electric beats SCANA on 9 of the 17 factors compared between the two stocks.
SCANA Corporation is a holding company. The Company, through its subsidiaries, is engaged in the generation, transmission, distribution and sale of electricity in South Carolina. The Company operates through segments, including Electric Operations, Gas Distribution, Gas Marketing and All Other. The Company is engaged in the purchase, transmission and sale of natural gas in North Carolina and South Carolina. The Electric Operations segment generates, transmits and distributes electricity. The Company’s regulated businesses include subsidiaries, such as South Carolina Electric & Gas Company (SCE&G), South Carolina Fuel Company, Inc. (Fuel Company), South Carolina Generating Company, Inc. (GENCO) and Public Service Company of North Carolina, Incorporated (PSNC Energy). The Company’s nonregulated businesses include subsidiaries, such as SCANA Energy Marketing, Inc. (SCANA Energy), ServiceCare, Inc., SCANA Services, Inc. and SCANA Corporate Security Services, Inc.
About El Paso Electric
El Paso Electric Company is a public utility company. As of December 31, 2016, the Company was engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in west Texas and southern New Mexico. As of December 31, 2016, the Company owned or had ownership interests in several electrical generating facilities providing it with a generating capability of approximately 2,080 megawatts (MW). The Company’s energy sources consists of nuclear fuel, natural gas, coal, purchased power and generated by Company-owned solar photovoltaic panels. As of December 31, 2016, the Company had power purchase agreements for 107 MW from solar photovoltaic generation facilities. As of December 31, 2016, the Company served approximately 411,100 residential, commercial, industrial, public authority and wholesale customers. The Company distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico.
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