MGE Energy (NASDAQ: MGEE) and OGE Energy (NYSE:OGE) are both mid-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.
Earnings & Valuation
This table compares MGE Energy and OGE Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MGE Energy||$544.74 million||3.71||$75.56 million||$2.20||26.52|
|OGE Energy||$2.26 billion||2.77||$338.20 million||$1.91||16.41|
Volatility and Risk
MGE Energy has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, OGE Energy has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.
MGE Energy pays an annual dividend of $1.29 per share and has a dividend yield of 2.2%. OGE Energy pays an annual dividend of $1.33 per share and has a dividend yield of 4.2%. MGE Energy pays out 58.6% of its earnings in the form of a dividend. OGE Energy pays out 69.6% 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. MGE Energy has increased its dividend for 11 consecutive years and OGE Energy has increased its dividend for 42 consecutive years. OGE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
38.3% of MGE Energy shares are owned by institutional investors. Comparatively, 62.4% of OGE Energy shares are owned by institutional investors. 0.2% of MGE Energy shares are owned by company insiders. Comparatively, 0.5% of OGE Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares MGE Energy and OGE Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and recommmendations for MGE Energy and OGE Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
OGE Energy has a consensus target price of $37.40, suggesting a potential upside of 19.30%. Given OGE Energy’s stronger consensus rating and higher possible upside, analysts clearly believe OGE Energy is more favorable than MGE Energy.
OGE Energy beats MGE Energy on 12 of the 17 factors compared between the two stocks.
About MGE Energy
MGE Energy, Inc. (MGE) is a public utility holding company. The Company operates through five segments: Regulated electric utility operations; Regulated gas utility operations; Nonregulated energy operations; Transmission investments, and All other. The Regulated electric utility operations segment is engaged in generating, purchasing and distributing electricity through Madison Gas and Electric Company (MGE). The Regulated gas utility operations segment is engaged in purchasing and distributing natural gas through MGE. The Nonregulated energy operations segment is engaged in owning and leasing electric generating capacity that assists MGE through MGE Energy’s subsidiaries MGE Power Elm Road, LLC and MGE Power West Campus, LLC. The Transmission investments segment represents its investment in American Transmission Company LLC and ATC Holdco, LLC. The All other segment is engaged in investing and financing in companies and property that relate to the regulated operations.
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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