El Paso Electric (NYSE:EE) and Pampa Energia (NYSE:PAM) are both utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.

Insider and Institutional Ownership

95.1% of El Paso Electric shares are held by institutional investors. Comparatively, 26.7% of Pampa Energia shares are held by institutional investors. 1.2% 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 stock will outperform the market over the long term.

Volatility & Risk

El Paso Electric has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Pampa Energia has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for El Paso Electric and Pampa Energia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
El Paso Electric 0 1 0 0 2.00
Pampa Energia 0 4 1 0 2.20

El Paso Electric presently has a consensus target price of $58.00, suggesting a potential downside of 12.91%. Pampa Energia has a consensus target price of $24.43, suggesting a potential upside of 121.72%. Given Pampa Energia’s stronger consensus rating and higher probable upside, analysts plainly believe Pampa Energia is more favorable than El Paso Electric.

Earnings and Valuation

This table compares El Paso Electric and Pampa Energia’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
El Paso Electric $861.99 million 3.15 $123.04 million $2.25 29.60
Pampa Energia $2.84 billion 0.25 $692.00 million $9.50 1.16

Pampa Energia has higher revenue and earnings than El Paso Electric. Pampa Energia is trading at a lower price-to-earnings ratio than El Paso Electric, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares El Paso Electric and Pampa Energia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
El Paso Electric 14.27% 7.73% 2.44%
Pampa Energia 23.97% 17.40% 7.00%

Summary

Pampa Energia beats El Paso Electric on 10 of the 14 factors compared between the two stocks.

About El Paso Electric

El Paso Electric Co. engages in the generation, transmission, and distribution of electricity in West Texas and southern New Mexico. Its energy sources consist of nuclear fuel, natural gas, coal, wind turbines, and purchased power. The company’s electrical generating facilities include Palo Verde Station, Newman Power Station, Rio Grande Power Station, Four Corners Station, Copper Power Station, and Wind Ranch. It serves residential, commercial, industrial, public authority and wholesale customers in El Paso, Texas and Las Cruces, New Mexico. The company was founded on August 30, 1901 and is headquartered in El Paso, TX.

About Pampa Energia

Pampa Energía S.A., an integrated electricity company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in Argentina. The company generates electricity through combined cycle gas-fired generating units, thermal generation plants, open-cycle gas turbines, and hydroelectric power generation systems, as well as through a wind farm. As of December 31, 2017, it had an electricity generation installed capacity of approximately 3,756 megawatts; 3 million electricity distribution customers in the northern region of the City of Buenos Aires and northwest of the greater Buenos Aires area; and 20,718 kilometers of high voltage transmission lines. The company is also involved in the exploration and production, and refining and distribution of oil and gas in Argentina, Venezuela, and Ecuador. In addition, it offers petrochemicals, such as intermediate gasoline products, aromatic solvents, hexane and other hydrogenated paraffinic solvents, and propellants for the cosmetic industry; and monomer styrene, and rubber and polymer products from natural gas, virgin naphtha, propane, and other supplies. As of December 31, 2017, the company had combined crude oil and natural gas proved reserves of approximately 167.1 million barrels of oil equivalent; one fully owned refinery with an installed capacity of approximately 30.2 thousand barrels per day; two storage plants with a capacity of approximately 1.2 million barrels; one lubricant plant; and three fully-owned petrochemical plants. It also operated a network of 250 gas stations. The company was formerly known as Pampa Holding S.A. and changed its name to Pampa Energía S.A. in September 2008. Pampa Energía S.A. was founded in 1945 and is headquartered in Buenos Aires, Argentina.

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