Financial Survey: Entergy (ETR) and Eversource Energy (NYSE:ES)

Entergy (NYSE: ETR) and Eversource Energy (NYSE:ES) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Risk & Volatility

Entergy has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Entergy $10.85 billion 1.32 -$564.50 million ($4.94) -16.03
Eversource Energy $7.64 billion 2.55 $942.30 million $3.08 19.97

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

Dividends

Entergy pays an annual dividend of $3.56 per share and has a dividend yield of 4.5%. Eversource Energy pays an annual dividend of $1.90 per share and has a dividend yield of 3.1%. Entergy pays out -72.1% 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. Entergy has increased its dividend for 2 consecutive years and Eversource Energy has increased its dividend for 3 consecutive years. Entergy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

82.8% of Entergy shares are held by institutional investors. Comparatively, 72.1% of Eversource Energy shares are held by institutional investors. 0.2% of Entergy shares are held by insiders. Comparatively, 0.5% of Eversource Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Entergy and Eversource Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Entergy -7.82% 14.76% 2.67%
Eversource Energy 12.84% 9.03% 3.01%

Analyst Recommendations

This is a breakdown of recent recommendations for Entergy and Eversource Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Entergy 0 7 6 0 2.46
Eversource Energy 1 5 3 0 2.22

Entergy presently has a consensus target price of $84.54, indicating a potential upside of 6.78%. Eversource Energy has a consensus target price of $64.50, indicating a potential upside of 4.84%. Given Entergy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Entergy is more favorable than Eversource Energy.

Summary

Entergy beats Eversource Energy on 9 of the 17 factors compared between the two stocks.

Entergy Company Profile

Entergy Corporation is a holding company. The Company is an integrated energy company engaged in electric power production and retail electric distribution operations. The Company operates through two business segments: Utility and Entergy Wholesale Commodities. The Utility segment includes the generation, transmission, distribution and sale of electric power to retail and wholesale customers in areas of Arkansas, Mississippi, Texas and Louisiana, including the City of New Orleans and operates a natural gas distribution business. The Entergy Wholesale Commodities segment includes the ownership, operation and decommissioning of nuclear power plants located in the northern United States and the sale of the electric power produced by its operating plants to wholesale customers. As of December 31, 2016, the Company owned and operated power plants with over 30,000 megawatts of aggregate electric generating capacity, including approximately 10,000 megawatts of nuclear-fueled capacity.

Eversource Energy Company Profile

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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