Head-To-Head Analysis: Alliant Energy (LNT) versus Xcel Energy (XEL)

Alliant Energy (NYSE: LNT) and Xcel Energy (NYSE:XEL) are both mid-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Dividends

Alliant Energy pays an annual dividend of $1.26 per share and has a dividend yield of 3.1%. Xcel Energy pays an annual dividend of $1.44 per share and has a dividend yield of 3.1%. Alliant Energy pays out 68.1% of its earnings in the form of a dividend. Xcel Energy pays out 61.8% 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. Alliant Energy has increased its dividend for 14 consecutive years and Xcel Energy has increased its dividend for 12 consecutive years. Alliant Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Alliant Energy and Xcel Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alliant Energy 13.13% 11.02% 3.22%
Xcel Energy 10.40% 10.63% 2.85%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Alliant Energy and Xcel Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alliant Energy 0 6 0 0 2.00
Xcel Energy 0 8 3 0 2.27

Alliant Energy currently has a consensus price target of $42.20, suggesting a potential upside of 5.00%. Xcel Energy has a consensus price target of $49.09, suggesting a potential upside of 6.42%. Given Xcel Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Xcel Energy is more favorable than Alliant Energy.

Insider and Institutional Ownership

68.5% of Alliant Energy shares are owned by institutional investors. Comparatively, 73.3% of Xcel Energy shares are owned by institutional investors. 0.3% of Alliant Energy shares are owned by insiders. Comparatively, 0.2% of Xcel Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Alliant Energy and Xcel Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alliant Energy $3.32 billion 2.80 $381.70 million $1.85 21.72
Xcel Energy $11.11 billion 2.11 $1.12 billion $2.33 19.80

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

Volatility and Risk

Alliant Energy has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, Xcel Energy has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500.

Summary

Alliant Energy beats Xcel Energy on 9 of the 17 factors compared between the two stocks.

Alliant Energy Company Profile

Alliant Energy Corporation operates as a regulated investor-owned public utility holding company. The Company’s segments include Utility and Non-regulated, Parent and Other. The Utility segment includes the operations of Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL), which serve retail customers in Iowa and Wisconsin. The Utility segment includes utility electric operations, utility gas operations and utility other, which includes steam operations and the unallocated portions of the utility business. Its Non-regulated, Parent and Other segment includes the operations of Alliant Energy Resources, LLC and its subsidiaries; Alliant Energy Corporate Services, Inc. (Corporate Services); the Alliant Energy parent company, and any Alliant Energy parent company consolidating adjustments. IPL and WPL own a portfolio of electric generating units located in Iowa, Wisconsin and Minnesota with a fuel mix, including coal, natural gas and renewable resources.

Xcel Energy Company Profile

Xcel Energy Inc. is a public utility holding company. The Company’s operations include the activity of four utility subsidiaries that serve electric and natural gas customers in eight states. The Company’s segments include regulated electric utility, regulated natural gas utility and all other. The Company’s utility subsidiaries include NSP-Minnesota, NSP-Wisconsin, Public Service Company of Colorado (PSCo) and Southwestern Public Service Co. (SPS), which serve customers in portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Along with WYCO Development LLC (WYCO), a joint venture formed with Colorado Interstate Gas Company, LLC (CIG) to develop and lease natural gas pipelines storage and compression facilities, and WestGas InterState, Inc. (WGI), an interstate natural gas pipeline company, these companies comprise the regulated utility operations.

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