Analyzing Terna Rete Elettrica Nazionale (OTCMKTS:TEZNY) & Fortis (NYSE:FTS)

Terna Rete Elettrica Nazionale (OTCMKTS:TEZNY) and Fortis (NYSE:FTS) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Volatility & Risk

Terna Rete Elettrica Nazionale has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Fortis has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Valuation & Earnings

This table compares Terna Rete Elettrica Nazionale and Fortis”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terna Rete Elettrica Nazionale	$3.98 billion	5.70	$1.15 billion	N/A	N/A
Fortis	$8.71 billion	3.21	$1.29 billion	$2.47	22.14

Fortis has higher revenue and earnings than Terna Rete Elettrica Nazionale.

Dividends

Terna Rete Elettrica Nazionale pays an annual dividend of $1.25 per share and has a dividend yield of 3.7%. Fortis pays an annual dividend of $1.82 per share and has a dividend yield of 3.3%. Fortis pays out 73.7% of its earnings in the form of a dividend. Fortis has raised its dividend for 5 consecutive years.

Profitability

This table compares Terna Rete Elettrica Nazionale and Fortis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Terna Rete Elettrica Nazionale	N/A	N/A	N/A
Fortis	14.17%	7.16%	2.34%

Insider and Institutional Ownership

57.8% of Fortis shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Terna Rete Elettrica Nazionale and Fortis, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terna Rete Elettrica Nazionale	0	1	0	0	2.00
Fortis	0	5	3	0	2.38

Fortis has a consensus target price of $66.33, indicating a potential upside of 21.29%. Given Fortis’ stronger consensus rating and higher possible upside, analysts clearly believe Fortis is more favorable than Terna Rete Elettrica Nazionale.

Summary

Fortis beats Terna Rete Elettrica Nazionale on 10 of the 14 factors compared between the two stocks.

About Terna Rete Elettrica Nazionale

Terna S.p.A., together with its subsidiaries, provides electricity transmission and dispatching services in Italy, other Euro-area countries, and internationally. It operates through Regulated, Non-Regulated, and International segments. The company is involved in the design, construction, management, development, operation, and maintenance of national transmission grid; dispatching and metering; and construction of storage systems. It also supplies transformers and cables; provides energy and connectivity services; and installs and operates interconnecting lines. In addition, the company designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids; industrial transformers for the steel and metals industries; special transformers for convertors used in electrochemical production; produces and sells marine and terrestrial cables; develops renewable energy projects; and undertakes private interconnector projects. Terna S.p.A. was founded in 1962 and is based in Rome, Italy.

About Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.