Head to Head Review: Evergy (NASDAQ:EVRG) & MGE Energy (NASDAQ:MGEE)

MGE Energy (NASDAQ:MGEE) and Evergy (NASDAQ:EVRG) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Valuation and Earnings

This table compares MGE Energy and Evergy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGE Energy	$676.94 million	4.22	$120.57 million	$3.69	21.20
Evergy	$5.85 billion	2.88	$873.50 million	$3.65	20.03

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

Analyst Ratings

This is a summary of current recommendations and price targets for MGE Energy and Evergy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGE Energy	1	2	0	0	1.67
Evergy	0	2	8	1	2.91

MGE Energy currently has a consensus target price of $79.00, suggesting a potential upside of 1.01%. Evergy has a consensus target price of $82.75, suggesting a potential upside of 13.20%. Given Evergy’s stronger consensus rating and higher possible upside, analysts plainly believe Evergy is more favorable than MGE Energy.

Insider and Institutional Ownership

52.6% of MGE Energy shares are held by institutional investors. Comparatively, 87.2% of Evergy shares are held by institutional investors. 0.2% of MGE Energy shares are held by insiders. Comparatively, 1.4% of Evergy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

MGE Energy has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, Evergy has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Profitability

This table compares MGE Energy and Evergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGE Energy	18.55%	10.65%	4.67%
Evergy	14.45%	8.66%	2.66%

Dividends

MGE Energy pays an annual dividend of $1.90 per share and has a dividend yield of 2.4%. Evergy pays an annual dividend of $2.78 per share and has a dividend yield of 3.8%. MGE Energy pays out 51.5% of its earnings in the form of a dividend. Evergy pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGE Energy has increased its dividend for 49 consecutive years and Evergy has increased its dividend for 20 consecutive years.

About MGE Energy

MGE Energy, Inc., through its subsidiaries, operates as a public utility holding company primarily in the United States. It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other segments. The company generates, purchases, and distributes electricity and natural gas in Wisconsin and Iowa; owns and leases electric generating capacity; and plans, constructs, operates, maintains, and expands transmission facilities to provide transmission power services. It generates electricity from coal-fired, gas-fired, and renewable energy sources. As of December 31, 2023, the company owned and operated 835 miles of overhead electric distribution lines; 1,330 miles of underground electric distribution cables; 49 substations with an installed capacity of 1.2 million kVA; and gas facilities, including 3,066 miles of distribution mains, as well as supplied electric service to approximately 163,000 customers. MGE Energy, Inc. founded in 2001 and is headquartered in Madison, Wisconsin.

About Evergy

Evergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.