Exelon (NYSE: EXC) and NorthWestern (NYSE:NWE) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.
Exelon pays an annual dividend of $1.38 per share and has a dividend yield of 3.6%. NorthWestern pays an annual dividend of $2.20 per share and has a dividend yield of 4.1%. Exelon pays out 53.1% of its earnings in the form of a dividend. NorthWestern pays out 66.7% 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. Exelon has increased its dividend for 2 consecutive years and NorthWestern has increased its dividend for 9 consecutive years. NorthWestern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
78.1% of Exelon shares are owned by institutional investors. Comparatively, 94.1% of NorthWestern shares are owned by institutional investors. 0.7% of Exelon shares are owned by insiders. Comparatively, 1.4% of NorthWestern shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of recent ratings for Exelon and NorthWestern, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Exelon currently has a consensus target price of $41.70, indicating a potential upside of 7.86%. NorthWestern has a consensus target price of $54.75, indicating a potential upside of 2.37%. Given Exelon’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Exelon is more favorable than NorthWestern.
This table compares Exelon and NorthWestern’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Exelon has a beta of 0.16, indicating that its share price is 84% less volatile than the S&P 500. Comparatively, NorthWestern has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500.
Earnings and Valuation
This table compares Exelon and NorthWestern’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Exelon||$33.53 billion||1.11||$3.77 billion||$2.60||14.87|
|NorthWestern||$1.31 billion||2.02||$162.70 million||$3.30||16.21|
Exelon has higher revenue and earnings than NorthWestern. Exelon is trading at a lower price-to-earnings ratio than NorthWestern, indicating that it is currently the more affordable of the two stocks.
NorthWestern beats Exelon on 11 of the 17 factors compared between the two stocks.
Exelon Corporation, a utility services holding company, engages in energy generation and delivery businesses in the United States and Canada. The company owns electric generating facilities, such as nuclear, fossil, wind, hydroelectric, and solar generating facilities. It also sells electricity to wholesale and retail customers; and sells natural gas, renewable energy, and other energy-related products and services. In addition, it is involved in the purchase and regulated retail sale of electricity; and the transmission and distribution of electricity to retail customers in Northern Illinois, Southeastern Pennsylvania, Central Maryland, Delaware, and Southern New Jersey. Further, the company engages in the purchase and regulated retail sale of natural gas, and the distribution of natural gas to retail customers in Pennsylvania counties surrounding the City of Philadelphia, Central Maryland, and Delaware. Additionally, it offers support services, including corporate strategy and development, legal, human resources, information technology, finance, real estate, security, corporate communications, supply at cost, engineering, distribution and transmission planning, asset management, system operations, and power procurement services. The company serves distribution utilities, municipalities, cooperatives, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.
NorthWestern Corporation, doing business as North-Western Energy, provides electricity and natural gas. The Company’s segments are Electric operations, Natural gas operations and All other. As of December 31, 2016, the Company provided electricity and natural gas to approximately 709,600 customers in Montana, South Dakota and Nebraska. It generates and distributes electricity in South Dakota; distributes natural gas in South Dakota and Nebraska, and generates and distributes electricity and distributes natural gas in Montana. Its regulated electric utility business in Montana includes generation, transmission and distribution. As of December 31, 2016, it provided retail electricity in 110 communities in South Dakota. Its regulated natural gas utility business in Montana includes production, storage, transmission and distribution. As of December 31, 2016, it provided natural gas to approximately 88,500 customers in 60 South Dakota communities and four Nebraska communities.
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