Analyzing DTE Energy (NYSE:DTE) and RWE (OTCMKTS:RWEOY)

DTE Energy (NYSE:DTE) and RWE (OTCMKTS:RWEOY) are both large-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

76.1% of DTE Energy shares are owned by institutional investors. 0.6% of DTE Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for DTE Energy and RWE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DTE Energy	0	4	9	1	2.79
RWE	0	5	1	0	2.17

DTE Energy presently has a consensus target price of $156.67, suggesting a potential upside of 6.13%. RWE has a consensus target price of $53.30, suggesting a potential downside of 15.17%. Given DTE Energy’s stronger consensus rating and higher probable upside, equities research analysts plainly believe DTE Energy is more favorable than RWE.

Profitability

This table compares DTE Energy and RWE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DTE Energy	7.65%	12.37%	2.84%
RWE	15.16%	4.77%	1.83%

Valuation and Earnings

This table compares DTE Energy and RWE”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DTE Energy	$15.81 billion	1.94	$1.46 billion	$6.07	24.32
RWE	$19.94 billion	2.29	$3.54 billion	$3.79	16.58

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

Risk and Volatility

DTE Energy has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Dividends

DTE Energy pays an annual dividend of $4.66 per share and has a dividend yield of 3.2%. RWE pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. DTE Energy pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RWE pays out 26.4% of its earnings in the form of a dividend. DTE Energy has raised its dividend for 16 consecutive years. DTE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

DTE Energy beats RWE on 12 of the 18 factors compared between the two stocks.

About DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to various residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through coal-fired plants, hydroelectric pumped storage, and nuclear plants, as well as wind and solar assets. This segment owns and operates distribution substations and line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to various residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. Its DTE Vantage segment offers metallurgical and petroleum coke to steel and other industries; and power generation, steam production, chilled water production, and wastewater treatment services, as well as air supplies compressed air to industrial customers. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1849 and is based in Detroit, Michigan.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.