Comparing Exelon (EXC) & Avista (AVA)

Exelon (NYSE: EXC) and Avista (NYSE:AVA) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Insider and Institutional Ownership

78.1% of Exelon shares are held by institutional investors. Comparatively, 77.7% of Avista shares are held by institutional investors. 0.7% of Exelon shares are held by insiders. Comparatively, 1.1% of Avista shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Exelon and Avista, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exelon 0 3 11 0 2.79
Avista 1 2 0 0 1.67

Exelon currently has a consensus price target of $42.69, indicating a potential upside of 0.22%. Avista has a consensus price target of $46.50, indicating a potential downside of 11.70%. Given Exelon’s stronger consensus rating and higher probable upside, research analysts clearly believe Exelon is more favorable than Avista.

Profitability

This table compares Exelon and Avista’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exelon 10.06% 9.17% 2.43%
Avista 7.66% 7.25% 2.27%

Risk & Volatility

Exelon has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500. Comparatively, Avista has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.

Valuation and Earnings

This table compares Exelon and Avista’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Exelon $33.53 billion 1.23 $3.77 billion $2.60 16.38
Avista $1.45 billion 2.39 $115.91 million $1.95 27.01

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

Dividends

Exelon pays an annual dividend of $1.38 per share and has a dividend yield of 3.2%. Avista pays an annual dividend of $1.49 per share and has a dividend yield of 2.8%. Exelon pays out 53.1% of its earnings in the form of a dividend. Avista pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Exelon has increased its dividend for 2 consecutive years and Avista has increased its dividend for 15 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Exelon beats Avista on 12 of the 17 factors compared between the two stocks.

Exelon Company Profile

Exelon Corporation, a utility services holding company, engages in energy generation and delivery businesses in the United States and Canada. The company owns electric generating facilities, such as nuclear, fossil, wind, hydroelectric, and solar generating facilities. It also sells electricity to wholesale and retail customers; and sells natural gas, renewable energy, and other energy-related products and services. In addition, it is involved in the purchase and regulated retail sale of electricity; and the transmission and distribution of electricity to retail customers in Northern Illinois, Southeastern Pennsylvania, Central Maryland, Delaware, and Southern New Jersey. Further, the company engages in the purchase and regulated retail sale of natural gas, and the distribution of natural gas to retail customers in Pennsylvania counties surrounding the City of Philadelphia, Central Maryland, and Delaware. Additionally, it offers support services, including corporate strategy and development, legal, human resources, information technology, finance, real estate, security, corporate communications, supply at cost, engineering, distribution and transmission planning, asset management, system operations, and power procurement services. The company serves distribution utilities, municipalities, cooperatives, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.

Avista Company Profile

Avista Corporation operates as an electric and natural gas utility company. It operates through two segments, Avista Utilities and AEL&P. The Avista Utilities segment provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho; and natural gas distribution services in parts of northeastern and southwestern Oregon, as well as generates electricity in Washington, Idaho, Oregon, and Montana. This segment also engages in the wholesale purchase and sale of electricity and natural gas. The AEL&P segment offers electric services to approximately 17,000 customers in the city and borough of Juneau, Alaska. The company generates electricity through hydro, thermal, and wind facilities. As of February 21, 2018, it supplied retail electric services to approximately 382,000 customers and retail natural gas service to approximately 347,000 customers. In addition, the company engages in sheet metal fabrication, venture fund investments, real estate investments, and other investments. Avista Corporation was founded in 1889 and is headquartered in Spokane, Washington.

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