PPL Corp (PPL) vs. Its Competitors Critical Review

PPL Corp (NYSE: PPL) is one of 21 publicly-traded companies in the “Multiline Utilities” industry, but how does it contrast to its competitors? We will compare PPL Corp to related companies based on the strength of its dividends, risk, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Institutional and Insider Ownership

71.0% of PPL Corp shares are held by institutional investors. Comparatively, 66.2% of shares of all “Multiline Utilities” companies are held by institutional investors. 0.4% of PPL Corp shares are held by insiders. Comparatively, 3.1% of shares of all “Multiline Utilities” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

PPL Corp has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, PPL Corp’s competitors have a beta of 0.61, suggesting that their average stock price is 39% less volatile than the S&P 500.

Dividends

PPL Corp pays an annual dividend of $1.58 per share and has a dividend yield of 4.1%. PPL Corp pays out 66.1% of its earnings in the form of a dividend. As a group, “Multiline Utilities” companies pay a dividend yield of 3.0% and pay out 71.1% of their earnings in the form of a dividend. PPL Corp has raised its dividend for 5 consecutive years. PPL Corp is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and price targets for PPL Corp and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PPL Corp 0 5 2 0 2.29
PPL Corp Competitors 361 1060 829 9 2.22

PPL Corp presently has a consensus price target of $38.36, suggesting a potential downside of 1.24%. As a group, “Multiline Utilities” companies have a potential upside of 6.32%. Given PPL Corp’s competitors higher probable upside, analysts clearly believe PPL Corp has less favorable growth aspects than its competitors.

Earnings & Valuation

This table compares PPL Corp and its competitors gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
PPL Corp $7.40 billion $4.04 billion 16.25
PPL Corp Competitors $8.13 billion $2.16 billion 20.70

PPL Corp’s competitors have higher revenue, but lower earnings than PPL Corp. PPL Corp is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares PPL Corp and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PPL Corp 16.93% 11.37% 2.97%
PPL Corp Competitors 8.48% 8.46% 1.94%

Summary

PPL Corp beats its competitors on 8 of the 15 factors compared.

PPL Corp Company Profile

PPL Corporation (PPL) is a utility holding company. Through its subsidiaries, PPL delivers electricity to customers in the United Kingdom, Pennsylvania, Kentucky, Virginia and Tennessee; delivers natural gas to customers in Kentucky, and generates electricity from power plants in Kentucky. PPL operates through U.K. Regulated Segment, Kentucky Regulated Segment and Pennsylvania Regulated Segment. The U.K. Regulated Segment consists of PPL Global, which includes PPL WPD Limited’s (WPD) regulated electricity distribution operations, the results of hedging the translation of WPD’s earnings from British pound sterling into United States dollars, and certain costs, such as the United States income taxes, administrative costs and allocated financing costs. Kentucky Regulated segment consists of the operations of Louisville Gas and Electric Company (LG&E) and KU Energy LLC (LKE). The Pennsylvania Regulated segment consists of PPL Electric Utilities Corporation (PPL Electric).

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