UIL Holdings (NYSE: UIL) and American Electric Power (NYSE:AEP) are both mid-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Insider & Institutional Ownership

71.2% of American Electric Power shares are owned by institutional investors. 0.2% of American Electric Power shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

American Electric Power pays an annual dividend of $2.36 per share and has a dividend yield of 3.3%. UIL Holdings does not pay a dividend. American Electric Power pays out 203.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UIL Holdings has raised its dividend for 4 consecutive years.

Profitability

This table compares UIL Holdings and American Electric Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UIL Holdings 4.73% 4.50% 1.21%
American Electric Power 3.60% 10.32% 2.91%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for UIL Holdings and American Electric Power, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UIL Holdings 0 0 0 0 N/A
American Electric Power 0 7 7 0 2.50

American Electric Power has a consensus target price of $72.23, indicating a potential downside of 0.50%. Given American Electric Power’s higher probable upside, analysts plainly believe American Electric Power is more favorable than UIL Holdings.

Valuation and Earnings

This table compares UIL Holdings and American Electric Power’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
UIL Holdings N/A N/A N/A N/A N/A
American Electric Power $15.95 billion 2.24 $5.12 billion $1.16 62.58

American Electric Power has higher revenue and earnings than UIL Holdings.

Summary

American Electric Power beats UIL Holdings on 8 of the 12 factors compared between the two stocks.

UIL Holdings Company Profile

UIL Holdings Corporation (UIL Holdings) is engaged in the ownership of its operating regulated utility businesses. The utility businesses consist of the electric distribution and transmission operations of The United Illuminating Company (UI) and the natural gas transportation, distribution and sales operations of The Southern Connecticut Gas Company (SCG), Connecticut Natural Gas Corporation (CNG) and The Berkshire Gas Company. The Company operates in two segments: Electric Distribution and Transmission, which is engaged in purchase, transmission, distribution and sale of electricity for residential, commercial and industrial purposes, and Gas Distribution, which is engaged in natural gas transportation, distribution and sales operations.

American Electric Power Company Profile

American Electric Power Company, Inc. (AEP) is a public utility holding company that owns, directly or indirectly, all of the outstanding common stock of its public utility subsidiaries and varying percentages of other subsidiaries. The service areas of the Company’s public utility subsidiaries cover the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. The Company’s segments include Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing. AEP’s vertically integrated utility operations are engaged in the generation, transmission and distribution of electricity for sale to retail and wholesale customers. Transmission and Distribution Utilities segment consists of the transmission and distribution of electricity for sale to retail and wholesale customers. AEP Transmission Holdco develops, constructs and operates transmission facilities.

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