Analyzing Alliant Energy (NASDAQ:LNT) & FirstEnergy (NYSE:FE)

Alliant Energy (NASDAQ:LNT) and FirstEnergy (NYSE:FE) are both large-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Risk & Volatility

Alliant Energy has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, FirstEnergy has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Insider & Institutional Ownership

79.9% of Alliant Energy shares are owned by institutional investors. Comparatively, 89.4% of FirstEnergy shares are owned by institutional investors. 0.3% of Alliant Energy shares are owned by company insiders. Comparatively, 0.2% of FirstEnergy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Alliant Energy and FirstEnergy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alliant Energy	1	2	5	0	2.50
FirstEnergy	0	6	7	1	2.64

Alliant Energy presently has a consensus price target of $70.86, indicating a potential upside of 8.96%. FirstEnergy has a consensus price target of $48.75, indicating a potential upside of 9.69%. Given FirstEnergy’s stronger consensus rating and higher probable upside, analysts plainly believe FirstEnergy is more favorable than Alliant Energy.

Profitability

This table compares Alliant Energy and FirstEnergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alliant Energy	19.14%	12.02%	3.65%
FirstEnergy	9.19%	11.15%	2.90%

Valuation & Earnings

This table compares Alliant Energy and FirstEnergy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alliant Energy	$4.27 billion	3.91	$690.00 million	$3.18	20.45
FirstEnergy	$13.47 billion	1.91	$978.00 million	$2.29	19.41

FirstEnergy has higher revenue and earnings than Alliant Energy. FirstEnergy is trading at a lower price-to-earnings ratio than Alliant Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Alliant Energy pays an annual dividend of $2.03 per share and has a dividend yield of 3.1%. FirstEnergy pays an annual dividend of $1.78 per share and has a dividend yield of 4.0%. Alliant Energy pays out 63.8% of its earnings in the form of a dividend. FirstEnergy pays out 77.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alliant Energy has raised its dividend for 22 consecutive years and FirstEnergy has raised its dividend for 3 consecutive years.

Summary

Alliant Energy beats FirstEnergy on 9 of the 17 factors compared between the two stocks.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the United States. It operates in three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its other subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. It serves retail customers in the farming, agriculture, industrial manufacturing, chemical, packaging, and food industries, as well as wholesale customers comprising municipalities and rural electric cooperatives. In addition, the company owns and operates a short-line rail freight service in Iowa; a Mississippi River barge, rail, and truck freight terminal in Illinois; freight brokerage services; wind turbine blade recycling services; and a rail-served warehouse in Iowa. Further, it holds interests in a natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a wind farm located in Oklahoma. The company was formerly known as Interstate Energy Corp. and changed its name to Alliant Energy Corporation in May 1999. Alliant Energy Corporation was incorporated in 1981 and is headquartered in Madison, Wisconsin.

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.