RWE (OTCMKTS:RWEOY) and Exelon (NASDAQ:EXC) Financial Contrast

Exelon (NASDAQ:EXC) and RWE (OTCMKTS:RWEOY) are both large-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Dividends

Exelon pays an annual dividend of $1.68 per share and has a dividend yield of 3.4%. RWE pays an annual dividend of $0.88 per share and has a dividend yield of 1.4%. Exelon pays out 61.5% of its earnings in the form of a dividend. RWE pays out 18.0% 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. Exelon has increased its dividend for 3 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings for Exelon and RWE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exelon	2	7	8	0	2.35
RWE	0	2	2	1	2.80

Exelon currently has a consensus target price of $50.93, suggesting a potential upside of 2.23%. RWE has a consensus target price of $53.30, suggesting a potential downside of 17.95%. Given Exelon’s higher possible upside, equities research analysts clearly believe Exelon is more favorable than RWE.

Insider and Institutional Ownership

80.9% of Exelon shares are held by institutional investors. 0.1% of Exelon shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Exelon and RWE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Exelon	11.41%	9.97%	2.48%
RWE	17.96%	4.96%	1.88%

Risk and Volatility

Exelon has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Earnings & Valuation

This table compares Exelon and RWE”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exelon	$24.26 billion	2.10	$2.77 billion	$2.73	18.25
RWE	$19.94 billion	2.37	$3.54 billion	$4.88	13.31

RWE has lower revenue, but higher earnings than Exelon. RWE is trading at a lower price-to-earnings ratio than Exelon, indicating that it is currently the more affordable of the two stocks.

Summary

Exelon beats RWE on 10 of the 18 factors compared between the two stocks.

About Exelon

Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.