Analyzing El Paso Electric (EE) and Enel Americas (ENIA)

El Paso Electric (NYSE: EE) and Enel Americas (NYSE:ENIA) are both mid-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Profitability

This table compares El Paso Electric and Enel Americas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
El Paso Electric 10.13% 8.44% 2.67%
Enel Americas N/A N/A N/A

Analyst Ratings

This is a breakdown of recent recommendations for El Paso Electric and Enel Americas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
El Paso Electric 1 2 0 0 1.67
Enel Americas 0 0 2 0 3.00

El Paso Electric presently has a consensus target price of $57.67, indicating a potential upside of 11.65%. Given El Paso Electric’s higher possible upside, equities analysts plainly believe El Paso Electric is more favorable than Enel Americas.

Valuation & Earnings

This table compares El Paso Electric and Enel Americas’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
El Paso Electric $886.94 million 2.36 $96.76 million $2.40 21.52
Enel Americas $7.76 billion 1.71 $497.97 million $0.36 32.17

Enel Americas has higher revenue and earnings than El Paso Electric. El Paso Electric is trading at a lower price-to-earnings ratio than Enel Americas, indicating that it is currently the more affordable of the two stocks.

Dividends

El Paso Electric pays an annual dividend of $1.34 per share and has a dividend yield of 2.6%. Enel Americas pays an annual dividend of $0.20 per share and has a dividend yield of 1.7%. El Paso Electric pays out 55.8% of its earnings in the form of a dividend. Enel Americas pays out 55.6% 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. El Paso Electric has increased its dividend for 6 consecutive years. El Paso Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

98.7% of El Paso Electric shares are held by institutional investors. Comparatively, 8.4% of Enel Americas shares are held by institutional investors. 1.3% of El Paso Electric shares are held by insiders. Comparatively, 0.0% of Enel Americas shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

El Paso Electric has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500. Comparatively, Enel Americas has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Summary

El Paso Electric beats Enel Americas on 10 of the 17 factors compared between the two stocks.

About El Paso Electric

El Paso Electric Company is a public utility company. As of December 31, 2016, the Company was engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in west Texas and southern New Mexico. As of December 31, 2016, the Company owned or had ownership interests in several electrical generating facilities providing it with a generating capability of approximately 2,080 megawatts (MW). The Company’s energy sources consists of nuclear fuel, natural gas, coal, purchased power and generated by Company-owned solar photovoltaic panels. As of December 31, 2016, the Company had power purchase agreements for 107 MW from solar photovoltaic generation facilities. As of December 31, 2016, the Company served approximately 411,100 residential, commercial, industrial, public authority and wholesale customers. The Company distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico.

About Enel Americas

Enel Americas S.A., formerly Enersis Americas S.A., through its subsidiaries and jointly controlled entities, is engaged in the electricity generation, transmission and distribution businesses in Chile, Brazil, Colombia, Peru and Argentina. The Company operates through two segments: Generation and Transmission, and Distribution. The Company’s Generation and Transmission segment operates through companies, including Central Comercializadora de Energia S.A. (Cemsa); Central Dock Sud S.A. (Dock Sud); Central Costanera S.A. (Costanera), and Hidroelectrica El Chocon S.A. (El Chocon). The Company’s Distribution segment operates through companies, including Empresa Distribuidora Sur S.A. (Edesur); Ampla Energia e Servicos S.A. (Ampla), and Companhia Energetica do Ceara S.A. (Coelce). The Company is engaged in non-electricity business through its subsidiary, Servicios Informaticos e Inmobiliarios Ltda. (SIEI). It holds interest in Yacylec S.A., which is an electricity transmission company.

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