Contrasting Xcel Energy (NASDAQ:XEL) and SSE (OTCMKTS:SSEZF)

Xcel Energy (NASDAQ:XEL) and SSE (OTCMKTS:SSEZF) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Dividends

Xcel Energy pays an annual dividend of $2.37 per share and has a dividend yield of 3.1%. SSE pays an annual dividend of $0.87 per share and has a dividend yield of 2.7%. Xcel Energy pays out 64.9% of its earnings in the form of a dividend. SSE pays out 419.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Xcel Energy has raised its dividend for 22 consecutive years. Xcel Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Xcel Energy and SSE”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xcel Energy	$14.67 billion	3.28	$2.02 billion	$3.65	21.09
SSE	N/A	N/A	N/A	$0.21	153.31

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

Analyst Recommendations

This is a breakdown of recent ratings for Xcel Energy and SSE, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xcel Energy	1	0	14	2	3.00
SSE	0	0	0	0	0.00

Xcel Energy currently has a consensus target price of $92.76, suggesting a potential upside of 20.52%. Given Xcel Energy’s stronger consensus rating and higher probable upside, equities analysts clearly believe Xcel Energy is more favorable than SSE.

Insider & Institutional Ownership

78.4% of Xcel Energy shares are held by institutional investors. Comparatively, 40.4% of SSE shares are held by institutional investors. 0.2% of Xcel Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Xcel Energy and SSE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xcel Energy	15.28%	10.65%	2.97%
SSE	N/A	N/A	N/A

Summary

Xcel Energy beats SSE on 14 of the 15 factors compared between the two stocks.

About Xcel Energy

Xcel Energy Inc., through its subsidiaries, engages in the generation, purchasing, transmission, distribution, and sale of electricity. It operates through Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments. The company generates electricity through wind, nuclear, hydroelectric, biomass, and solar energy sources, as well as coal, natural gas, oil, wood, and refuse-derived fuels. It also purchases, transports, distributes, and sells natural gas to retail customers, as well as transports customer-owned natural gas. In addition, the company develops and leases natural gas pipelines, and storage and compression facilities; and invests in rental housing projects and nonregulated assets, as well as procures equipment for the construction of renewable generation facilities. It serves residential, commercial, and industrial customers in the portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. The company was incorporated in 1909 and is headquartered in Minneapolis, Minnesota.

About SSE

SSE plc engages in the generation, transmission, distribution, and supply of electricity. It generates electricity from water, gas, coal, oil, and multi fuel. The company distributes electricity to approximately 3.8 million homes and businesses across the north of the central belt of Scotland and central southern England; and owns, operates, and develops high voltage electricity transmission system in the north of Scotland and remote islands. It also produces, stores, distributes, and supplies gas. In addition, it engages in the electricity and utility contracting, telecommunications, energy trading, insurance, and property holding businesses, as well as provides maintenance services. The company was formerly known as Scottish and Southern Energy plc and changed its name to SSE plc in September 2011. SSE plc was incorporated in 1989 and is based in Perth, the United Kingdom.