Avangrid (NYSE: AGR) and MDU Resources Group (NYSE:MDU) are both mid-cap utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitabiliy, institutional ownership, valuation and analyst recommendations.
Analyst Recommendations
This is a summary of current recommendations and price targets for Avangrid and MDU Resources Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Avangrid | 1 | 0 | 4 | 0 | 2.60 |
| MDU Resources Group | 0 | 2 | 1 | 0 | 2.33 |
Avangrid currently has a consensus price target of $44.88, indicating a potential downside of 2.47%. MDU Resources Group has a consensus price target of $36.00, indicating a potential upside of 38.51%. Given MDU Resources Group’s higher probable upside, analysts plainly believe MDU Resources Group is more favorable than Avangrid.
Dividends
Avangrid pays an annual dividend of $1.73 per share and has a dividend yield of 3.8%. MDU Resources Group pays an annual dividend of $0.77 per share and has a dividend yield of 3.0%. Avangrid pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MDU Resources Group pays out 67.0% of its earnings in the form of a dividend. MDU Resources Group has increased its dividend for 7 consecutive years.
Profitability
This table compares Avangrid and MDU Resources Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Avangrid | 11.25% | 4.52% | 2.20% |
| MDU Resources Group | 5.37% | 10.26% | 3.75% |
Earnings & Valuation
This table compares Avangrid and MDU Resources Group’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Avangrid | $6.00 billion | 2.37 | $1.94 billion | $2.18 | 21.11 |
| MDU Resources Group | $4.23 billion | 1.20 | $622.43 million | $1.15 | 22.60 |
Avangrid has higher revenue and earnings than MDU Resources Group. Avangrid is trading at a lower price-to-earnings ratio than MDU Resources Group, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
13.5% of Avangrid shares are held by institutional investors. Comparatively, 63.7% of MDU Resources Group shares are held by institutional investors. 0.3% of Avangrid shares are held by company insiders. Comparatively, 1.0% of MDU Resources Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk & Volatility
Avangrid has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, MDU Resources Group has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.
Summary
MDU Resources Group beats Avangrid on 9 of the 17 factors compared between the two stocks.
About Avangrid
Avangrid, Inc. is an energy and utility company. The Company operates through three segments: Networks, Renewables and Gas. The Networks segment includes all the energy transmission and distribution activities, and any other regulated activity originating in New York and Maine, and regulated electric distribution, electric transmission and gas distribution activities originating in Connecticut and Massachusetts. The Renewables segment owns, develops, constructs and/or operates electricity generation, including renewable and thermal generators, and associated transmission facilities. The Renewables segment includes activities relating to renewable energy, mainly wind energy generation and trading related with such activities. The Gas segment operates a natural gas storage and natural gas trading business through its subsidiaries, Enstor, Inc. and Enstor Energy Services, LLC.
About MDU Resources Group
MDU Resources Group, Inc. is engaged in regulated energy delivery and construction materials and services business. The Company’s businesses segments are electric, natural gas distribution, pipeline and midstream, construction materials and contracting, and construction services. The electric segment generates, transmits and distributes electricity. The natural gas distribution segment distributes natural gas. The pipeline and midstream segment provides natural gas transportation, underground storage, processing and gathering services, as well as oil gathering. The construction materials and contracting segment mines aggregates and markets crushed stone, sand, gravel and related construction materials, including ready-mixed concrete, asphalt, liquid asphalt and other value-added products. The construction services segment provides utility construction services in constructing and maintaining electric and communication lines, and external lighting and traffic signalization.
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