UIL Holdings (NYSE: UIL) and El Paso Electric (NYSE:EE) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares UIL Holdings and El Paso Electric’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%
El Paso Electric 11.45% 9.95% 3.14%

Institutional & Insider Ownership

98.0% of El Paso Electric shares are held by institutional investors. 1.3% of El Paso Electric shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares UIL Holdings and El Paso Electric’s 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
El Paso Electric $934.44 million 2.37 $360.31 million $2.77 19.73

El Paso Electric has higher revenue and earnings than UIL Holdings.

Analyst Ratings

This is a summary of current ratings for UIL Holdings and El Paso Electric, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UIL Holdings 0 0 0 0 N/A
El Paso Electric 0 4 0 0 2.00

El Paso Electric has a consensus price target of $53.00, indicating a potential downside of 3.02%. Given El Paso Electric’s higher probable upside, analysts plainly believe El Paso Electric is more favorable than UIL Holdings.

Dividends

El Paso Electric pays an annual dividend of $1.34 per share and has a dividend yield of 2.5%. UIL Holdings does not pay a dividend. El Paso Electric pays out 48.4% of its earnings in the form of a dividend. El Paso Electric has increased its dividend for 5 consecutive years.

Summary

El Paso Electric beats UIL Holdings on 9 of the 11 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.

El Paso Electric Company Profile

El Paso Electric Company is a public utility company. As of December 31, 2016, the Company was engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in west Texas and southern New Mexico. As of December 31, 2016, the Company owned or had ownership interests in several electrical generating facilities providing it with a generating capability of approximately 2,080 megawatts (MW). The Company’s energy sources consists of nuclear fuel, natural gas, coal, purchased power and generated by Company-owned solar photovoltaic panels. As of December 31, 2016, the Company had power purchase agreements for 107 MW from solar photovoltaic generation facilities. As of December 31, 2016, the Company served approximately 411,100 residential, commercial, industrial, public authority and wholesale customers. The Company distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico.

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