National Grid Transco, PLC (NYSE: NGG) and Sempra Energy (NYSE:SRE) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Dividends

National Grid Transco, PLC pays an annual dividend of $2.89 per share and has a dividend yield of 4.4%. Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 2.8%. Sempra Energy pays out 48.7% of its earnings in the form of a dividend. Sempra Energy has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

5.4% of National Grid Transco, PLC shares are owned by institutional investors. Comparatively, 81.2% of Sempra Energy shares are owned by institutional investors. 0.2% of Sempra Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares National Grid Transco, PLC and Sempra Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
National Grid Transco, PLC $19.43 billion 2.32 $6.58 billion N/A N/A
Sempra Energy $10.97 billion 2.73 $3.71 billion $6.75 17.67

National Grid Transco, PLC has higher revenue and earnings than Sempra Energy.

Profitability

This table compares National Grid Transco, PLC and Sempra Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Grid Transco, PLC N/A N/A N/A
Sempra Energy 15.51% 9.11% 2.84%

Volatility and Risk

National Grid Transco, PLC has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for National Grid Transco, PLC and Sempra Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Grid Transco, PLC 2 5 7 0 2.36
Sempra Energy 0 2 4 0 2.67

National Grid Transco, PLC currently has a consensus price target of $69.00, suggesting a potential upside of 5.54%. Sempra Energy has a consensus price target of $121.60, suggesting a potential upside of 1.94%. Given National Grid Transco, PLC’s higher possible upside, analysts clearly believe National Grid Transco, PLC is more favorable than Sempra Energy.

Summary

Sempra Energy beats National Grid Transco, PLC on 9 of the 15 factors compared between the two stocks.

National Grid Transco, PLC Company Profile

National Grid plc is an electricity and gas utility company focused on transmission and distribution activities in electricity and gas in both the United Kingdom and the United States. The Company’s segments include UK Electricity Transmission, which is engaged in high voltage electricity transmission networks in Great Britain; UK Gas Transmission, which is the gas transmission network in Great Britain and United Kingdom liquefied natural gas (LNG) storage activities; UK Gas Distribution, which includes approximately four of the eight regional networks of Great Britain’s gas distribution system, and US Regulated, which includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York, and New England and electricity generation facilities in New York. Its other activities relate to non-regulated businesses and other commercial operations not included within the above segments.

Sempra Energy Company Profile

Sempra Energy is a holding company. The Company’s principal operating units are Sempra Utilities, which includes its San Diego Gas & Electric Company (SDG&E), Southern California Gas Company (SoCalGas) and Sempra South American Utilities segments, and Sempra Infrastructure, which includes its Sempra Mexico, Sempra Renewables and Sempra LNG & Midstream segments. As of December 31, 2016, SDG&E’s service area covered 4,100 square miles. Sempra South American Utilities operates Chilquinta Energia, which serves customers in the region of Valparaiso in central Chile. As of December 31, 2016, SoCalGas had natural gas franchises with the 12 counties and the 223 cities in its service territory. Sempra LNG & Midstream owns land in Simpson County, Mississippi Hub. Sempra LNG & Midstream owns land in Port Arthur, Texas. Sempra Renewables has operations, investments or development projects in the various United States markets.

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