Financial Review: Wec Acquisition (TEG) & PPL (PPL)

Wec Acquisition (NYSE: TEG) and PPL (NYSE:PPL) are both mid-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Valuation & Earnings

This table compares Wec Acquisition and PPL’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wec Acquisition N/A N/A N/A $3.29 21.16
PPL $7.52 billion 2.85 $1.90 billion $2.21 14.06

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

Profitability

This table compares Wec Acquisition and PPL’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wec Acquisition 11.28% 15.70% 4.69%
PPL 20.60% 15.30% 3.99%

Insider and Institutional Ownership

71.2% of PPL shares are owned by institutional investors. 0.4% of PPL shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

PPL pays an annual dividend of $1.58 per share and has a dividend yield of 5.1%. Wec Acquisition does not pay a dividend. PPL pays out 71.5% of its earnings in the form of a dividend. PPL has raised its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Wec Acquisition and PPL, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wec Acquisition 0 0 0 0 N/A
PPL 1 5 3 0 2.22

PPL has a consensus price target of $38.69, indicating a potential upside of 24.48%. Given PPL’s higher possible upside, analysts clearly believe PPL is more favorable than Wec Acquisition.

Summary

PPL beats Wec Acquisition on 8 of the 13 factors compared between the two stocks.

Wec Acquisition Company Profile

Integrys Energy Group, Inc. is an energy holding company, which provides regulated natural gas and electricity, non-regulated renewable energy, and compressed natural gas products and services. The Company operates through four segments: natural gas utility, electric utility, electric transmission investment, and holding company and other. The natural gas utility segment includes the operations of Minnesota Energy Resources Corporation, Michigan Gas Utilities Corporation, North Shore Gas Company, The Peoples Gas Light and Coke Company and Wisconsin Public Service Corporation (WPS). The electric utility segment includes the electric utility operations of WPS. The electric transmission investment segment includes its 34% interest in American Transmission Company LLC. The holding company and other segment include the operations of the Integrys Energy Group holding company, Integrys Transportation Fuels, LLC, WPS Power Development LLC and the Peoples Energy, LLC holding company.

PPL 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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