Head-To-Head Contrast: OGE Energy (NYSE:OGE) and RWE (OTCMKTS:RWEOY)

OGE Energy (NYSE:OGE) and RWE (OTCMKTS:RWEOY) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Volatility and Risk

OGE Energy has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for OGE Energy and RWE, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OGE Energy	0	7	4	0	2.36
RWE	0	5	2	0	2.29

OGE Energy currently has a consensus target price of $49.80, suggesting a potential upside of 6.48%. RWE has a consensus target price of $53.30, suggesting a potential downside of 19.63%. Given OGE Energy’s stronger consensus rating and higher probable upside, equities analysts clearly believe OGE Energy is more favorable than RWE.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OGE Energy	14.44%	9.48%	3.24%
RWE	15.16%	4.77%	1.83%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OGE Energy	$3.24 billion	2.99	$470.70 million	$2.27	20.60
RWE	$19.94 billion	2.41	$3.54 billion	$3.79	17.50

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

Dividends

OGE Energy pays an annual dividend of $1.70 per share and has a dividend yield of 3.6%. RWE pays an annual dividend of $0.99 per share and has a dividend yield of 1.5%. OGE Energy pays out 74.9% of its earnings in the form of a dividend. RWE pays out 26.1% 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. OGE Energy has raised its dividend for 18 consecutive years. OGE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

71.8% of OGE Energy shares are held by institutional investors. 0.6% of OGE Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

OGE Energy beats RWE on 11 of the 17 factors compared between the two stocks.

About OGE Energy

OGE Energy Corp., together with its subsidiaries, operates as an energy services provider in the United States. The company generates, transmits, distributes, and sells electric energy. In addition, it provides retail electric service to approximately 896,000 customers, which covers a service area of approximately 30,000 square miles in Oklahoma and western Arkansas; and owns and operates coal-fired, natural gas-fired, wind-powered, and solar-powered generating assets. OGE Energy Corp. was founded in 1902 and is headquartered in Oklahoma City, Oklahoma.

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.