United Utilities Group (OTCMKTS:UUGRY) versus FirstEnergy (NYSE:FE) Critical Contrast

United Utilities Group (OTCMKTS:UUGRY) and FirstEnergy (NYSE:FE) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Valuation & Earnings

This table compares United Utilities Group and FirstEnergy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Utilities Group	$3.51 billion	4.11	$786.53 million	N/A	N/A
FirstEnergy	$15.09 billion	1.82	$1.02 billion	$1.88	25.27

FirstEnergy has higher revenue and earnings than United Utilities Group.

Volatility and Risk

United Utilities Group has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, FirstEnergy has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.

Dividends

United Utilities Group pays an annual dividend of $1.78 per share and has a dividend yield of 4.6%. FirstEnergy pays an annual dividend of $1.86 per share and has a dividend yield of 3.9%. FirstEnergy pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FirstEnergy has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

89.4% of FirstEnergy shares are held by institutional investors. 0.1% of FirstEnergy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for United Utilities Group and FirstEnergy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Utilities Group	0	4	3	1	2.62
FirstEnergy	0	6	7	0	2.54

FirstEnergy has a consensus target price of $52.83, suggesting a potential upside of 11.23%. Given FirstEnergy’s higher possible upside, analysts clearly believe FirstEnergy is more favorable than United Utilities Group.

Profitability

This table compares United Utilities Group and FirstEnergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Utilities Group	N/A	N/A	N/A
FirstEnergy	6.86%	10.51%	2.62%

Summary

FirstEnergy beats United Utilities Group on 10 of the 16 factors compared between the two stocks.

About United Utilities Group

United Utilities Group PLC provides water and wastewater services in the United Kingdom. It is involved in the renewable energy generation, corporate trustee, financing, and property management activities; and provision of consulting, and project management services. The company operates 43,000 kilometers of water pipes; and 79,000 kilometers of wastewater pipes. United Utilities Group PLC was incorporated in 2008 and is based in Warrington, the United Kingdom.

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.