WEC Energy Group (NYSE: WEC) and Consolidated Edison (NYSE:ED) are both large-cap utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.
Insider and Institutional Ownership
73.0% of WEC Energy Group shares are held by institutional investors. Comparatively, 56.6% of Consolidated Edison shares are held by institutional investors. 1.0% of WEC Energy Group shares are held by company insiders. Comparatively, 0.2% of Consolidated Edison shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
WEC Energy Group pays an annual dividend of $2.21 per share and has a dividend yield of 3.6%. Consolidated Edison pays an annual dividend of $2.86 per share and has a dividend yield of 3.7%. WEC Energy Group pays out 70.4% of its earnings in the form of a dividend. Consolidated Edison pays out 69.9% 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. WEC Energy Group has increased its dividend for 7 consecutive years and Consolidated Edison has increased its dividend for 43 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares WEC Energy Group and Consolidated Edison’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|WEC Energy Group||$7.65 billion||2.56||$1.20 billion||$3.14||19.79|
|Consolidated Edison||$12.03 billion||2.00||$1.53 billion||$4.09||18.97|
Consolidated Edison has higher revenue and earnings than WEC Energy Group. Consolidated Edison is trading at a lower price-to-earnings ratio than WEC Energy Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
WEC Energy Group has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500. Comparatively, Consolidated Edison has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500.
This is a summary of current ratings and price targets for WEC Energy Group and Consolidated Edison, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WEC Energy Group||1||8||1||0||2.00|
WEC Energy Group presently has a consensus price target of $65.33, indicating a potential upside of 5.12%. Consolidated Edison has a consensus price target of $80.85, indicating a potential upside of 4.19%. Given WEC Energy Group’s stronger consensus rating and higher probable upside, research analysts plainly believe WEC Energy Group is more favorable than Consolidated Edison.
This table compares WEC Energy Group and Consolidated Edison’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WEC Energy Group||15.75%||10.81%||3.24%|
WEC Energy Group beats Consolidated Edison on 10 of the 16 factors compared between the two stocks.
WEC Energy Group Company Profile
WEC Energy Group, Inc. was a diversified holding company with natural gas and electric utility operations, an approximately 60% equity ownership interest in American Transmission Company LLC, and non-utility electric operations through its We Power business, as of December 31, 2016. Its segments include Wisconsin; Illinois; Other States; Electric Transmission; We Power, and Corporate and Other. Wisconsin includes the electric and natural gas utility operations of Wisconsin Electric Power Company, Wisconsin Gas LLC, and Wisconsin Public Service Corporation, including WE’s and WPS’s electric and natural gas operations in the state of Michigan. Illinois includes the natural gas utility and non-utility operations of The Peoples Gas Light and Coke Company and North Shore Gas Company. Other states includes the natural gas utility and non-utility operations of Minnesota Energy Resources Corporation and Michigan Gas Utilities Corporation.
Consolidated Edison Company Profile
Consolidated Edison, Inc. (Con Edison) is a holding company. The Company operates through its subsidiaries, which include Consolidated Edison Company of New York, Inc. (CECONY), Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. (the Clean Energy Businesses) and Con Edison Transmission, Inc. (Con Edison Transmission). CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. CECONY provides electricity, natural gas and steam to customers in New York City and Westchester County. O&R’s principal business operations are its regulated electric and gas delivery businesses. The Clean Energy Businesses develop, own and operate renewable and energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. Con Edison Transmission, through its subsidiaries, invests in electric transmission facilities and gas pipeline and storage facilities.
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