Head-To-Head Comparison: CenterPoint Energy (NYSE:CNP) and NorthWestern (NASDAQ:NWE)

NorthWestern (NASDAQ:NWE) and CenterPoint Energy (NYSE:CNP) are both utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Profitability

This table compares NorthWestern and CenterPoint Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NorthWestern	10.13%	8.03%	2.73%
CenterPoint Energy	11.61%	11.10%	2.68%

Volatility & Risk

NorthWestern has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, CenterPoint Energy has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Dividends

NorthWestern pays an annual dividend of $2.68 per share and has a dividend yield of 3.8%. CenterPoint Energy pays an annual dividend of $0.92 per share and has a dividend yield of 2.2%. NorthWestern pays out 96.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CenterPoint Energy pays out 54.1% of its earnings in the form of a dividend. NorthWestern has raised its dividend for 21 consecutive years and CenterPoint Energy has raised its dividend for 5 consecutive years. NorthWestern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

96.1% of NorthWestern shares are owned by institutional investors. Comparatively, 91.8% of CenterPoint Energy shares are owned by institutional investors. 0.6% of NorthWestern shares are owned by company insiders. Comparatively, 0.2% of CenterPoint 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.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NorthWestern	$1.61 billion	2.67	$181.09 million	$2.77	25.22
CenterPoint Energy	$9.36 billion	2.93	$1.05 billion	$1.70	24.48

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for NorthWestern and CenterPoint Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NorthWestern	0	3	3	0	2.50
CenterPoint Energy	1	7	9	0	2.47

NorthWestern presently has a consensus price target of $73.30, suggesting a potential upside of 4.92%. CenterPoint Energy has a consensus price target of $45.57, suggesting a potential upside of 9.52%. Given CenterPoint Energy’s higher possible upside, analysts plainly believe CenterPoint Energy is more favorable than NorthWestern.

Summary

CenterPoint Energy beats NorthWestern on 9 of the 17 factors compared between the two stocks.

About NorthWestern

NorthWestern Energy Group, Inc. provides electricity and natural gas to residential, commercial, and various industrial customers. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,600 miles of electric transmission and 18,674 miles of electric distribution lines with approximately 395 transmission and distribution substations; and 2,235 miles of natural gas transmission and 5,155 miles of natural gas distribution lines with approximately 133 city gate stations in Montana. It also operates 1,310 miles of electric transmission and 2,365 miles of electric distribution lines in South Dakota with approximately 124 transmission and distribution substations; and 55 miles of natural gas transmission and 2,573 miles of natural gas distribution lines in South Dakota and Nebraska. The company provides electricity and/or natural gas to approximately 775,300 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Energy Group, Inc. was founded in 1923 and is based in Sioux Falls, South Dakota.

About CenterPoint Energy

CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company operates through two segments, Electric and Natural Gas. The Electric segment includes electric transmission and distribution services to electric customers and electric generation assets, as well as optimizes assets in the wholesale power market. The Natural Gas segment engages in the intrastate natural gas sales, and natural gas transportation and distribution for residential, commercial, industrial and institutional customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas; permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies; and provides maintenance and repair services of home appliances to customers in Minnesota and home repair protection plans to natural gas customers in Indiana, Mississippi, Ohio, and Texas through a third party. It serves approximately 2,534,730 metered customers; owned 348 substations with transformer capacity of 79,719 megavolt amperes; and owned and operated 217 miles of intrastate pipeline in Louisiana and Texas. The company was founded in 1866 and is headquartered in Houston, Texas.