Southern (OTCMKTS: CPYYY) and CENTRICA PLC/S (OTCMKTS:CPYYY) are both large-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.
Valuation and Earnings
This table compares Southern and CENTRICA PLC/S’s gross revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Southern has higher earnings, but lower revenue than CENTRICA PLC/S. CENTRICA PLC/S is trading at a lower price-to-earnings ratio than Southern, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Southern has a beta of -0.06, suggesting that its share price is 106% less volatile than the S&P 500. Comparatively, CENTRICA PLC/S has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.
Southern pays an annual dividend of $2.40 per share and has a dividend yield of 5.5%. CENTRICA PLC/S pays an annual dividend of $0.85 per share and has a dividend yield of 11.3%. Southern pays out 79.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CENTRICA PLC/S pays out 130.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southern has raised its dividend for 16 consecutive years.
This table compares Southern and CENTRICA PLC/S’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
This is a breakdown of recent ratings for Southern and CENTRICA PLC/S, as provided by MarketBeat.
||Strong Buy Ratings
Southern presently has a consensus target price of $46.39, indicating a potential upside of 5.68%. Given Southern’s higher possible upside, analysts clearly believe Southern is more favorable than CENTRICA PLC/S.
Institutional and Insider Ownership
57.3% of Southern shares are held by institutional investors. Comparatively, 0.1% of CENTRICA PLC/S shares are held by institutional investors. 0.7% of Southern 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.
Southern beats CENTRICA PLC/S on 11 of the 16 factors compared between the two stocks.
The Southern Co. is a holding company, which engages in the sale of electricity. It operates through the following segments: Traditional Electric Operating Companies, Southern Power, Southern Company Gas, and All Other. The Traditional Electric Operating Companies segment refers to vertically integrated utilities that own generation, transmission and distribution facilities, and supplies electric services in the states of Alabama, Georgia, Florida, and Mississippi. The Southern Power segment constructs, acquires, owns, and manages generation assets such as renewable energy projects and sells electricity in the wholesale market. The Southern Company Gas segment distributes natural gas through natural gas distribution facilities in the states of Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland. The All Other segment covers segments below the quantitative threshold. The company was founded on November 9, 1945 and is headquartered in Atlanta, GA.
About CENTRICA PLC/S
Centrica plc operates as an integrated energy company in the United Kingdom, the Republic of Ireland, Germany, Norway, rest of Europe, the United States, Canada, and internationally. The company operates through Centrica Consumer, Centrica Business, Exploration & Production, and Centrica Storage segments. It supplies gas and electricity to residential customers, as well as offers energy-related services; and generates power from combined cycle gas turbines and nuclear assets. The company also provides installation, repair, and maintenance services for domestic central heating, plumbing and drains, and gas and kitchen appliances; heating, ventilation, and air conditioning equipment; and water heaters, as well as offers breakdown services. In addition, it is involved in the procurement, trading, and optimization of energy; and supplies energy efficiency solutions and technologies to residential customers. Further, the company produces and processes gas and oil; develops new fields to maintain reserves; constructs, owns, and exploits infrastructure; and engages in the social enterprise investment fund activities. Additionally, it is involved in the trade and optimization of energy activities; provision of vehicle leasing, commercial, and insurance services, as well as energy management products and services; and operates a gas storage, and franchise network. The company also provides intermediary services, including claims handling and administration, as well as business, finance, and data management services; and offers sea freight water transport services. It primarily supplies energy and services to approximately 25 million customers under the British Gas, Direct Energy, and Bord Gáis Energy brands. The company was formerly known as Yieldtop plc and changed its name to Centrica plc in December 1996. Centrica plc was incorporated in 1995 and is headquartered in Windsor, the United Kingdom.
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