PG&E (NYSE: AEE) and Ameren (NYSE:AEE) are both large-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.
This is a summary of recent recommendations and price targets for PG&E and Ameren, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PG&E pays an annual dividend of $0.53 per share and has a dividend yield of 1.1%. Ameren pays an annual dividend of $1.83 per share and has a dividend yield of 2.8%. PG&E pays out 14.4% of its earnings in the form of a dividend. Ameren pays out 64.7% 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. PG&E has raised its dividend for 2 consecutive years and Ameren has raised its dividend for 4 consecutive years. Ameren is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares PG&E and Ameren’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PG&E||$17.14 billion||1.42||$1.66 billion||$3.68||12.76|
|Ameren||$6.18 billion||2.58||$523.00 million||$2.83||23.11|
PG&E has higher revenue and earnings than Ameren. PG&E is trading at a lower price-to-earnings ratio than Ameren, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
PG&E has a beta of -0.07, suggesting that its share price is 107% less volatile than the S&P 500. Comparatively, Ameren has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.
This table compares PG&E and Ameren’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
81.4% of PG&E shares are owned by institutional investors. Comparatively, 70.5% of Ameren shares are owned by institutional investors. 0.2% of PG&E shares are owned by company insiders. Comparatively, 0.4% of Ameren shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Ameren beats PG&E on 9 of the 17 factors compared between the two stocks.
PG&E Company Profile
PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to residential, commercial, industrial, and agricultural customers in northern and central California, the United States. The company's electricity distribution network consists of approximately 107,200 circuit miles of distribution lines, 59 transmission switching substations, and 605 distribution substations; and electricity transmission network comprises approximately 19,200 circuit miles of interconnected transmission lines and 92 electric transmission substations. Its natural gas system consists of approximately 42,800 miles of distribution pipelines, approximately 6,400 miles of backbone and local transmission pipelines, and various storage facilities. The company operates various electricity generation facilities, such as nuclear, hydroelectric, fossil fuel-fired, and solar. PG&E Corporation was founded in 1905 and is based in San Francisco, California.
Ameren Company Profile
Ameren Corporation operates as a public utility holding company in the United States. It operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. The company engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution and transmission businesses. It primarily generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, methane gas, and solar. The company serves residential, commercial, and industrial customers through a generation capacity of approximately 10,200 megawatts. It serves 2.4 million electric customers and approximately 900,000 natural gas customers in a 64,000-square-mile area. The company was founded in 1881 and is headquartered in St. Louis, Missouri.
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