Consolidated Edison (NYSE:ED) vs. Black Hills (NYSE:BKH) Financial Survey

Consolidated Edison (NYSE:ED) and Black Hills (NYSE:BKH) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Consolidated Edison and Black Hills, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consolidated Edison	6	8	5	0	1.95
Black Hills	0	1	6	1	3.00

Consolidated Edison presently has a consensus price target of $109.74, indicating a potential downside of 7.95%. Black Hills has a consensus price target of $85.00, indicating a potential downside of 2.50%. Given Black Hills’ stronger consensus rating and higher probable upside, analysts clearly believe Black Hills is more favorable than Consolidated Edison.

Profitability

This table compares Consolidated Edison and Black Hills’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consolidated Edison	12.70%	8.58%	2.88%
Black Hills	13.49%	8.17%	2.98%

Dividends

Consolidated Edison pays an annual dividend of $3.55 per share and has a dividend yield of 3.0%. Black Hills pays an annual dividend of $2.81 per share and has a dividend yield of 3.2%. Consolidated Edison pays out 56.8% of its earnings in the form of a dividend. Black Hills pays out 67.5% 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. Consolidated Edison has raised its dividend for 52 consecutive years and Black Hills has raised its dividend for 55 consecutive years. Black Hills is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Consolidated Edison has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, Black Hills has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Insider and Institutional Ownership

66.3% of Consolidated Edison shares are held by institutional investors. Comparatively, 86.7% of Black Hills shares are held by institutional investors. 0.2% of Consolidated Edison shares are held by insiders. Comparatively, 0.6% of Black Hills shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Consolidated Edison and Black Hills”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consolidated Edison	$16.92 billion	2.62	$2.02 billion	$6.25	19.08
Black Hills	$2.31 billion	2.89	$291.60 million	$4.16	20.96

Consolidated Edison has higher revenue and earnings than Black Hills. Consolidated Edison is trading at a lower price-to-earnings ratio than Black Hills, indicating that it is currently the more affordable of the two stocks.

Summary

Black Hills beats Consolidated Edison on 13 of the 18 factors compared between the two stocks.

About Consolidated Edison

Consolidated Edison, Inc. is an energy holding company whose principal business is delivering electricity, natural gas and steam through regulated utility subsidiaries. Its services include generating, transmitting and distributing energy to residential, commercial and industrial customers. Its largest subsidiary, Consolidated Edison Company of New York, serves customers in New York City and Westchester County. Orange and Rockland Utilities serves parts of southeastern New York and northern New Jersey.

About Black Hills

Black Hills Corporation is an energy company headquartered in Rapid City, South Dakota. Through its utility operations, it provides electric and natural gas service to communities across Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company’s businesses include generating, transmitting and distributing electricity, as well as distributing natural gas. Its energy operations use a mix of resources, including natural gas, coal and renewable sources, to support electric service.