Head-To-Head Comparison: Public Service Enterprise Group (PEG) & Alliant Energy (LNT)

Public Service Enterprise Group (NYSE: PEG) and Alliant Energy (NYSE:LNT) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.

Insider and Institutional Ownership

68.2% of Public Service Enterprise Group shares are held by institutional investors. Comparatively, 72.6% of Alliant Energy shares are held by institutional investors. 0.6% of Public Service Enterprise Group shares are held by company insiders. Comparatively, 0.3% of Alliant Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Public Service Enterprise Group and Alliant Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Public Service Enterprise Group 21.68% 11.22% 3.62%
Alliant Energy 14.17% 11.41% 3.37%

Risk & Volatility

Public Service Enterprise Group has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Alliant Energy has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.

Earnings and Valuation

This table compares Public Service Enterprise Group and Alliant Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Public Service Enterprise Group $9.08 billion 2.97 $1.57 billion $2.93 18.20
Alliant Energy $3.38 billion 2.81 $467.50 million $1.93 21.29

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Public Service Enterprise Group and Alliant Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Public Service Enterprise Group 0 6 10 0 2.63
Alliant Energy 0 5 0 0 2.00

Public Service Enterprise Group presently has a consensus target price of $52.35, indicating a potential downside of 1.86%. Alliant Energy has a consensus target price of $42.80, indicating a potential upside of 4.16%. Given Alliant Energy’s higher probable upside, analysts plainly believe Alliant Energy is more favorable than Public Service Enterprise Group.

Dividends

Public Service Enterprise Group pays an annual dividend of $1.80 per share and has a dividend yield of 3.4%. Alliant Energy pays an annual dividend of $1.34 per share and has a dividend yield of 3.3%. Public Service Enterprise Group pays out 61.4% of its earnings in the form of a dividend. Alliant Energy pays out 69.4% 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. Public Service Enterprise Group has raised its dividend for 6 consecutive years and Alliant Energy has raised its dividend for 12 consecutive years. Public Service Enterprise Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Public Service Enterprise Group beats Alliant Energy on 12 of the 17 factors compared between the two stocks.

About Public Service Enterprise Group

Public Service Enterprise Group Incorporated, through its subsidiaries, operates as an energy company primarily in the Northeastern and Mid- Atlantic United States. It operates through two segments, PSE&G and Power. The PSE&G segment transmits electricity; and distributes electricity and gas to residential, commercial, and industrial customers, as well as invests in solar generation projects, and energy efficiency and related programs; and offers appliance services and repairs to customers. As of December 31, 2017, it had electric transmission and distribution system of 24,000 circuit miles and 853,000 poles; and 18,000 miles of gas mains, 12 gas distribution headquarters, 2 sub-headquarters, and 1 meter shop. This segment also owns and operates 50 switching stations with an aggregate installed capacity of 36,023 megavolt-amperes (MVA), as well as 244 substations with an aggregate installed capacity of 8,250 MVA; and 4 electric distribution headquarters and 5 sub-headquarters, as well as 58 natural gas metering and regulating stations. The Power segment operates nuclear, coal, gas, oil-fired, solar, and renewable generation facilities. As of December 31, 2017, it had an installed fossil and nuclear generating capacity of approximately 10,562 megawatts. Public Service Enterprise Group Incorporated was founded in 1985 and is headquartered in Newark, New Jersey.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the Midwest region of the United States. It operates through three segments: Electric, Gas, and Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. As of December 31, 2017, IPL supplied electricity to 490,000 retail customers and natural gas to 220,000 retail customers; and WPL supplied electricity to 470,000 retail customers and natural gas to 190,000 retail customers. It offers electric utility services to retail customers in the farming, agriculture, industrial manufacturing, chemical, and paper industries. In addition, the company holds investments in various businesses, which provide freight services through a short-line railway between Cedar Rapids and Iowa City, Iowa; a barge terminal and hauling services on the Mississippi River; and other transfer and storage services. Further, it owns a non-regulated 347 megawatt (MW) natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a non-regulated 99 MW Franklin County wind farm located in Franklin County, Iowa. Alliant Energy Corporation was founded in 1917 and is headquartered in Madison, Wisconsin.

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