Public Service Enterprise Group (PEG) and Consolidated Edison (ED) Financial Comparison

Consolidated Edison (NYSE: ED) and Public Service Enterprise Group (NYSE:PEG) are both large-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Profitability

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This table compares Consolidated Edison and Public Service Enterprise Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consolidated Edison 12.67% 8.51% 2.60%
Public Service Enterprise Group 17.33% 11.25% 3.63%

Volatility and Risk

Consolidated Edison has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500.

Earnings and Valuation

This table compares Consolidated Edison and Public Service Enterprise Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Consolidated Edison $12.03 billion 1.99 $1.53 billion $4.09 18.84
Public Service Enterprise Group $9.08 billion 2.77 $1.57 billion $2.93 17.02

Public Service Enterprise Group has lower revenue, but higher earnings than Consolidated Edison. Public Service Enterprise Group is trading at a lower price-to-earnings ratio than Consolidated Edison, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

56.7% of Consolidated Edison shares are owned by institutional investors. Comparatively, 68.4% of Public Service Enterprise Group shares are owned by institutional investors. 0.2% of Consolidated Edison shares are owned by company insiders. Comparatively, 0.6% of Public Service Enterprise Group shares are owned 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.

Dividends

Consolidated Edison pays an annual dividend of $2.86 per share and has a dividend yield of 3.7%. Public Service Enterprise Group pays an annual dividend of $1.80 per share and has a dividend yield of 3.6%. Consolidated Edison pays out 69.9% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 61.4% 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. Consolidated Edison has raised its dividend for 43 consecutive years and Public Service Enterprise Group has raised its dividend for 6 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Consolidated Edison and Public Service Enterprise Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consolidated Edison 4 5 1 0 1.70
Public Service Enterprise Group 0 6 10 0 2.63

Consolidated Edison presently has a consensus target price of $80.61, indicating a potential upside of 4.59%. Public Service Enterprise Group has a consensus target price of $51.12, indicating a potential upside of 2.50%. Given Consolidated Edison’s higher probable upside, equities research analysts plainly believe Consolidated Edison is more favorable than Public Service Enterprise Group.

Summary

Public Service Enterprise Group beats Consolidated Edison on 11 of the 17 factors compared between the two stocks.

About Consolidated Edison

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.

About Public Service Enterprise Group

Public Service Enterprise Group Incorporated (PSEG) is a holding company. The Company is an energy company with operations located primarily in the Northeastern and Mid-Atlantic United States. The Company’s segments include Public Service Electric and Gas Company (PSE&G), PSEG Power LLC (Power) and Other. PSEG is engaged in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSE&G is also the provider of last resort for gas and electric commodity service for end users in its service territory. Power is a multi-regional energy supply company that integrates the operations of its merchant nuclear and fossil generating assets with its power marketing businesses through energy sales in energy markets and fuel supply functions primarily in the Northeast and Mid-Atlantic United States through its principal subsidiaries. In addition, Power owns and operates solar generation in various states.

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