Financial Comparison: CenterPoint Energy (NYSE:CNP) vs. WEC Energy Group (NYSE:WEC)

CenterPoint Energy (NYSE:CNP) and WEC Energy Group (NYSE:WEC) are both large-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CenterPoint Energy	$9.36 billion	3.00	$1.05 billion	$1.75	24.23
WEC Energy Group	$9.80 billion	3.86	$1.56 billion	$5.51	21.09

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

Volatility & Risk

CenterPoint Energy has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, WEC Energy Group has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CenterPoint Energy	11.76%	11.16%	2.68%
WEC Energy Group	17.54%	13.49%	3.73%

Dividends

CenterPoint Energy pays an annual dividend of $0.96 per share and has a dividend yield of 2.3%. WEC Energy Group pays an annual dividend of $3.81 per share and has a dividend yield of 3.3%. CenterPoint Energy pays out 54.9% of its earnings in the form of a dividend. WEC Energy Group pays out 69.1% 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. CenterPoint Energy has raised its dividend for 5 consecutive years and WEC Energy Group has raised its dividend for 23 consecutive years. WEC Energy Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

91.8% of CenterPoint Energy shares are held by institutional investors. Comparatively, 77.2% of WEC Energy Group shares are held by institutional investors. 0.2% of CenterPoint Energy shares are held by company insiders. Comparatively, 0.5% of WEC Energy Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for CenterPoint Energy and WEC Energy Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CenterPoint Energy	0	7	10	0	2.59
WEC Energy Group	1	9	8	0	2.39

CenterPoint Energy presently has a consensus target price of $44.29, suggesting a potential upside of 4.47%. WEC Energy Group has a consensus target price of $118.00, suggesting a potential upside of 1.56%. Given CenterPoint Energy’s stronger consensus rating and higher probable upside, research analysts clearly believe CenterPoint Energy is more favorable than WEC Energy Group.

Summary

WEC Energy Group beats CenterPoint Energy on 10 of the 17 factors compared between the two stocks.

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.

About WEC Energy Group

WEC Energy Group, Inc., through its subsidiaries, provides regulated natural gas and electricity, and renewable and nonregulated renewable energy services in the United States. It operates through Wisconsin, Illinois, Other States, Electric Transmission, and Non-Utility Energy Infrastructure segments. The company generates and distributes electricity from coal, natural gas, oil, and nuclear, as well as renewable energy resources, including wind, solar, hydroelectric, and biomass; and distributes and transports natural gas. It also owns, maintains, monitors, and operates electric transmission systems; and generates, distributes, and sells steam. As of December 31, 2023, the company operated approximately 35,500 miles of overhead distribution lines and 36,500 miles of underground distribution cables, as well as 430 electric distribution substations and 523,700 line transformers; approximately 46,400 miles of natural gas distribution mains; 1,700 miles of natural gas transmission mains; 2.4 million natural gas lateral services; 490 natural gas distribution and transmission gate stations; and 69.3 billion cubic feet of working gas capacities in underground natural gas storage fields. The company was formerly known as Wisconsin Energy Corporation and changed its name to WEC Energy Group, Inc. in June 2015. WEC Energy Group, Inc. was founded in 1896 and is headquartered in Milwaukee, Wisconsin.