Critical Analysis: OGE Energy (OGE) and Its Competitors

OGE Energy (NYSE: OGE) is one of 81 publicly-traded companies in the “Electric Utilities” industry, but how does it contrast to its peers? We will compare OGE Energy to related companies based on the strength of its profitability, earnings, dividends, institutional ownership, analyst recommendations, valuation and risk.

Dividends

OGE Energy pays an annual dividend of $1.33 per share and has a dividend yield of 3.7%. OGE Energy pays out 69.6% of its earnings in the form of a dividend. As a group, “Electric Utilities” companies pay a dividend yield of 3.2% and pay out 58.0% of their earnings in the form of a dividend. OGE Energy has raised its dividend for 10 consecutive years.

Risk and Volatility

OGE Energy has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, OGE Energy’s peers have a beta of 0.66, suggesting that their average stock price is 34% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for OGE Energy and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OGE Energy 1 5 1 0 2.00
OGE Energy Competitors 532 2959 2375 42 2.33

OGE Energy presently has a consensus target price of $36.67, indicating a potential upside of 2.54%. As a group, “Electric Utilities” companies have a potential upside of 6.80%. Given OGE Energy’s peers stronger consensus rating and higher possible upside, analysts clearly believe OGE Energy has less favorable growth aspects than its peers.

Institutional and Insider Ownership

62.2% of OGE Energy shares are held by institutional investors. Comparatively, 65.6% of shares of all “Electric Utilities” companies are held by institutional investors. 0.5% of OGE Energy shares are held by company insiders. Comparatively, 2.7% of shares of all “Electric Utilities” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares OGE Energy and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OGE Energy 16.69% 10.92% 3.73%
OGE Energy Competitors -10.06% 8.54% 2.55%

Earnings & Valuation

This table compares OGE Energy and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
OGE Energy $2.26 billion $338.20 million 18.72
OGE Energy Competitors $7.66 billion $831.80 million 51.55

OGE Energy’s peers have higher revenue and earnings than OGE Energy. OGE Energy is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

OGE Energy peers beat OGE Energy on 10 of the 15 factors compared.

About OGE Energy

OGE Energy Corp. (OGE Energy) is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company operates through two segments: electric utility and natural gas midstream operations. The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through Oklahoma Gas and Electric Company (OG&E). OG&E is an electric utility in Oklahoma and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. The natural gas midstream operations segment represents the Company’s investment in Enable Midstream Partners, LP (Enable) through subsidiaries, and ultimately OGE Enogex Holdings LLC (OGE Holdings). Enable’s assets and operations are organized into two segments: gathering and processing, and transportation and storage.

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