PPL (PPL) vs. Eversource Energy (ES) Financial Survey

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

Insider and Institutional Ownership

80.1% of PPL shares are held by institutional investors. Comparatively, 73.3% of Eversource Energy shares are held by institutional investors. 0.4% of PPL shares are held by insiders. Comparatively, 0.5% of Eversource Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for PPL and Eversource Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PPL 1 6 5 0 2.33
Eversource Energy 0 5 7 0 2.58

PPL currently has a consensus price target of $34.20, suggesting a potential upside of 20.63%. Eversource Energy has a consensus price target of $63.22, suggesting a potential upside of 5.02%. Given PPL’s higher probable upside, equities analysts plainly believe PPL is more favorable than Eversource Energy.

Earnings and Valuation

This table compares PPL and Eversource Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PPL $7.45 billion 2.66 $1.13 billion $2.25 12.60
Eversource Energy $7.75 billion 2.46 $987.99 million $3.11 19.36

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

Profitability

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

Net Margins Return on Equity Return on Assets
PPL 18.08% 15.30% 4.01%
Eversource Energy 12.59% 9.07% 2.81%

Volatility and Risk

PPL has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500.

Dividends

PPL pays an annual dividend of $1.64 per share and has a dividend yield of 5.8%. Eversource Energy pays an annual dividend of $2.02 per share and has a dividend yield of 3.4%. PPL pays out 72.9% of its earnings in the form of a dividend. Eversource Energy pays out 65.0% 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. PPL has raised its dividend for 6 consecutive years and Eversource Energy has raised its dividend for 2 consecutive years. PPL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

PPL beats Eversource Energy on 10 of the 17 factors compared between the two stocks.

About PPL

PPL Corporation, a utility holding company, delivers electricity and natural gas in the United States and the United Kingdom. The company operates in three segments: U.K. Regulated, Kentucky Regulated, and Pennsylvania Regulated. It serves 411,000 electric and 326,000 natural gas customers in Louisville and adjacent areas in Kentucky; 525,000 customers in central, southeastern, and western Kentucky; and approximately 28,000 customers in 5 counties in southwestern Virginia, and 3 customers in Tennessee. The company also provides electric delivery services to approximately 1.4 million customers in Pennsylvania; and operates electricity distribution networks in the United Kingdom, as well as delivers natural gas to customers in Kentucky; generates electricity from power plants in Kentucky; and sells wholesale electricity to 10 municipalities in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates in three segments: Electric Distribution, Electric Transmission, and Natural Gas Distribution. It is involved in the transmission and distribution of electricity; and distribution of natural gas. The company operates water regulated utilities. It also provides water services to approximately 226,000 customers. It serves residential, commercial, industrial, municipal, fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire, the United States. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was founded in 1927 and is based in Springfield, Massachusetts.

Receive News & Ratings for PPL Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for PPL and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply