Head-To-Head Contrast: Duke Energy (DUK) & Pacific Gas and Electric (PCG)

Duke Energy (NYSE: DUK) and Pacific Gas and Electric (NYSE:PCG) are both large-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Valuation & Earnings

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This table compares Duke Energy and Pacific Gas and Electric’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Duke Energy $23.57 billion 2.32 $3.06 billion $4.57 17.10
Pacific Gas and Electric $17.14 billion 1.32 $1.66 billion $3.68 11.95

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

Insider & Institutional Ownership

57.0% of Duke Energy shares are held by institutional investors. Comparatively, 81.2% of Pacific Gas and Electric shares are held by institutional investors. 0.1% of Duke Energy shares are held by company insiders. Comparatively, 0.2% of Pacific Gas and Electric shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Duke Energy and Pacific Gas and Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Duke Energy 12.95% 7.72% 2.36%
Pacific Gas and Electric 9.69% 9.93% 2.72%

Volatility & Risk

Duke Energy has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500. Comparatively, Pacific Gas and Electric has a beta of -0.01, suggesting that its share price is 101% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Duke Energy and Pacific Gas and Electric, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Duke Energy 2 9 4 0 2.13
Pacific Gas and Electric 1 10 5 0 2.25

Duke Energy currently has a consensus price target of $84.38, suggesting a potential upside of 7.96%. Pacific Gas and Electric has a consensus price target of $57.35, suggesting a potential upside of 30.44%. Given Pacific Gas and Electric’s stronger consensus rating and higher probable upside, analysts clearly believe Pacific Gas and Electric is more favorable than Duke Energy.

Dividends

Duke Energy pays an annual dividend of $3.56 per share and has a dividend yield of 4.6%. Pacific Gas and Electric pays an annual dividend of $1.06 per share and has a dividend yield of 2.4%. Duke Energy pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pacific Gas and Electric pays out 28.8% of its earnings in the form of a dividend. Duke Energy has raised its dividend for 11 consecutive years and Pacific Gas and Electric has raised its dividend for 2 consecutive years. Duke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Duke Energy beats Pacific Gas and Electric on 9 of the 17 factors compared between the two stocks.

Duke Energy Company Profile

Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. It operates through three segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure, and Commercial Renewables. The Electric Utilities and Infrastructure segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest; uses coal, hydroelectric, natural gas, oil, renewable sources, and nuclear fuel to generate electricity; and engages in the wholesale of electricity to municipalities, electric cooperative utilities, and other load-serving entities. This segment serves approximately 7.6 million retail electric customers in 6 states in the Southeast and Midwest regions of the United States covering a service territory of approximately 95,000 square miles; and owns approximately 49,506 megawatts (MW) of generation capacity. The Gas Utilities and Infrastructure segment distributes natural gas to residential, commercial, industrial, and power generation natural gas customers; and owns, operates, and invests in various pipeline transmission and natural gas storage facilities. It has approximately 1.5 million customers, including 1 million customers located in North Carolina, South Carolina, and Tennessee, as well as 526,000 customers located in southwestern Ohio and northern Kentucky. The Commercial Renewables segment acquires, builds, develops, and operates wind and solar renewable generation projects, including nonregulated renewable energy and energy storage services to utilities, electric cooperatives, municipalities, and commercial and industrial customers. This segment has 21 wind and 63 solar facilities with a capacity of 2,907 MW across 14 states. The company was formerly known as Duke Energy Holding Corp. and changed its name to Duke Energy Corporation in April 2005. Duke Energy Corporation is headquartered in Charlotte, North Carolina.

Pacific Gas and Electric 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.

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