Head to Head Analysis: Enel (OTCMKTS:ENLAY) and E.On (OTCMKTS:EONGY)

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

Risk and Volatility

Enel has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, E.On has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Enel and E.On, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enel	2	6	1	0	1.89
E.On	1	7	2	0	2.10

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Enel	7.91%	12.66%	3.47%
E.On	2.20%	12.06%	2.72%

Dividends

Enel pays an annual dividend of $0.26 per share and has a dividend yield of 2.3%. E.On pays an annual dividend of $0.46 per share and has a dividend yield of 2.0%. Enel pays out 38.8% of its earnings in the form of a dividend. E.On pays out 62.2% 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. Enel is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Enel and E.On”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enel	$90.88 billion	1.25	$4.78 billion	$0.67	16.64
E.On	$89.03 billion	0.67	$1.96 billion	$0.74	30.82

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

Summary

Enel beats E.On on 9 of the 13 factors compared between the two stocks.

About Enel

Enel SpA operates as an integrated operator in electricity and gas industries worldwide. It generates, distributes, transmits, and sells electricity; transports and markets natural gas; and constructs and operates generation plants and distribution grids. The company also provides energy management services; e-vehicle charging infrastructure for public and private customers; and engages in the energy commodities business. It operates wind, thermal, hydroelectric, nuclear, solar photovoltaic, and geothermal power plants. The company was founded in 1962 and is headquartered in Rome, Italy.

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.