Financial Contrast: PG&E (PCG) and Westar Energy (WR)
PG&E (NYSE: WR) and Westar Energy (NYSE:WR) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.
PG&E pays an annual dividend of $0.53 per share and has a dividend yield of 1.1%. Westar Energy pays an annual dividend of $1.60 per share and has a dividend yield of 3.0%. PG&E pays out 14.4% of its earnings in the form of a dividend. Westar Energy pays out 70.5% 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. PG&E has raised its dividend for 2 consecutive years and Westar Energy has raised its dividend for 12 consecutive years. Westar Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
PG&E has a beta of -0.07, meaning that its stock price is 107% less volatile than the S&P 500. Comparatively, Westar Energy has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.
This table compares PG&E and Westar Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and recommmendations for PG&E and Westar Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PG&E presently has a consensus price target of $52.89, indicating a potential upside of 12.61%. Westar Energy has a consensus price target of $56.00, indicating a potential upside of 3.70%. Given PG&E’s higher possible upside, equities analysts plainly believe PG&E is more favorable than Westar Energy.
Insider & Institutional Ownership
81.4% of PG&E shares are held by institutional investors. Comparatively, 75.1% of Westar Energy shares are held by institutional investors. 0.2% of PG&E shares are held by company insiders. Comparatively, 0.7% of Westar Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares PG&E and Westar Energy’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PG&E||$17.14 billion||1.42||$1.66 billion||$3.68||12.76|
|Westar Energy||$2.57 billion||2.99||$323.92 million||$2.27||23.79|
PG&E has higher revenue and earnings than Westar Energy. PG&E is trading at a lower price-to-earnings ratio than Westar Energy, indicating that it is currently the more affordable of the two stocks.
PG&E beats Westar Energy on 9 of the 17 factors compared between the two stocks.
PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to residential, commercial, industrial, and agricultural customers in northern and central California, the United States. The company's electricity distribution network consists of approximately 107,200 circuit miles of distribution lines, 59 transmission switching substations, and 605 distribution substations; and electricity transmission network comprises approximately 19,200 circuit miles of interconnected transmission lines and 92 electric transmission substations. Its natural gas system consists of approximately 42,800 miles of distribution pipelines, approximately 6,400 miles of backbone and local transmission pipelines, and various storage facilities. The company operates various electricity generation facilities, such as nuclear, hydroelectric, fossil fuel-fired, and solar. PG&E Corporation was founded in 1905 and is based in San Francisco, California.
About Westar Energy
Westar Energy, Inc., an electric utility company, generates, transmits, and distributes electricity in Kansas. It has 6,602 megawatts of electric generation capacity, which generates electricity through coal, nuclear fuels, natural gas/diesel, and renewable sources. The company also owns approximately 6,400 miles of transmission lines, 24,200 miles of overhead distribution lines, and 5,100 miles of underground distribution lines. It retails electricity to residential, commercial, and industrial customers, as well as for lighting public streets and highways; and engages in the electricity wholesale to electric cooperatives, municipalities, other electric utilities, and regional transmission organizations. The company provides its services in central and northeastern Kansas, including the cities of Topeka, Lawrence, Manhattan, Salina, and Hutchinson, as well as in south-central and southeastern Kansas, such as the city of Wichita. It serves approximately 708,000 customers. Westar Energy, Inc. was founded in 1924 and is headquartered in Topeka, Kansas.
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