Financial Survey: DTE Energy (NYSE:DTE) versus E.On (OTCMKTS:EONGY)

E.On (OTCMKTS:EONGY) and DTE Energy (NYSE:DTE) are both large-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Profitability

This table compares E.On and DTE Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
E.On	4.49%	11.54%	2.72%
DTE Energy	8.00%	12.19%	2.74%

Risk and Volatility

E.On has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, DTE Energy has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500.

Valuation and Earnings

This table compares E.On and DTE Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
E.On	$89.03 billion	0.60	$1.96 billion	$1.50	13.58
DTE Energy	$15.81 billion	1.82	$1.46 billion	$6.32	21.86

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

Analyst Ratings

This is a breakdown of recent ratings for E.On and DTE Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
E.On	0	6	2	0	2.25
DTE Energy	0	5	9	1	2.73

DTE Energy has a consensus target price of $158.62, indicating a potential upside of 14.81%. Given DTE Energy’s stronger consensus rating and higher probable upside, analysts plainly believe DTE Energy is more favorable than E.On.

Insider and Institutional Ownership

76.1% of DTE Energy shares are held by institutional investors. 0.6% of DTE Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

E.On pays an annual dividend of $0.49 per share and has a dividend yield of 2.4%. DTE Energy pays an annual dividend of $4.66 per share and has a dividend yield of 3.4%. E.On pays out 32.7% of its earnings in the form of a dividend. DTE Energy pays out 73.7% 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. DTE Energy has raised its dividend for 16 consecutive years. DTE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

DTE Energy beats E.On on 14 of the 18 factors compared between the two stocks.

About E.On

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, rest of Europe, and internationally. It operates through two segments, Energy Networks and Customer Solutions. The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services. The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities. Additionally, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties. The company was founded in 1923 and is headquartered in Essen, Germany.

About DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to various residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through coal-fired plants, hydroelectric pumped storage, and nuclear plants, as well as wind and solar assets. This segment owns and operates distribution substations and line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to various residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. Its DTE Vantage segment offers metallurgical and petroleum coke to steel and other industries; and power generation, steam production, chilled water production, and wastewater treatment services, as well as air supplies compressed air to industrial customers. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1849 and is based in Detroit, Michigan.