FirstEnergy (NYSE:FE – Get Free Report) and Xcel Energy (NASDAQ:XEL – Get Free Report) are both large-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.
Dividends
FirstEnergy pays an annual dividend of $1.86 per share and has a dividend yield of 4.0%. Xcel Energy pays an annual dividend of $2.37 per share and has a dividend yield of 2.9%. FirstEnergy pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Xcel Energy pays out 55.2% of its earnings in the form of a dividend. FirstEnergy has raised its dividend for 3 consecutive years and Xcel Energy has raised its dividend for 22 consecutive years.
Valuation and Earnings
This table compares FirstEnergy and Xcel Energy”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| FirstEnergy | $15.09 billion | 1.78 | $1.02 billion | $2.08 | 22.27 |
| Xcel Energy | $14.67 billion | 3.52 | $2.02 billion | $4.29 | 18.76 |
Xcel Energy has lower revenue, but higher earnings than FirstEnergy. Xcel Energy is trading at a lower price-to-earnings ratio than FirstEnergy, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares FirstEnergy and Xcel Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FirstEnergy | 7.40% | 11.07% | 2.73% |
| Xcel Energy | 17.94% | 11.10% | 3.13% |
Risk & Volatility
FirstEnergy has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Xcel Energy has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations for FirstEnergy and Xcel Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FirstEnergy | 0 | 4 | 8 | 0 | 2.67 |
| Xcel Energy | 0 | 1 | 15 | 1 | 3.00 |
FirstEnergy currently has a consensus price target of $50.77, suggesting a potential upside of 9.59%. Xcel Energy has a consensus price target of $90.71, suggesting a potential upside of 12.73%. Given Xcel Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Xcel Energy is more favorable than FirstEnergy.
Institutional & Insider Ownership
89.4% of FirstEnergy shares are owned by institutional investors. Comparatively, 78.4% of Xcel Energy shares are owned by institutional investors. 0.1% of FirstEnergy shares are owned by insiders. Comparatively, 0.2% of Xcel Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Summary
Xcel Energy beats FirstEnergy on 13 of the 18 factors compared between the two stocks.
About FirstEnergy
FirstEnergy Corp. is an investor-owned electric utility holding company focused primarily on regulated electricity transmission and distribution. Through its utility subsidiaries, it delivers electricity to residential, commercial and industrial customers across parts of Ohio, Pennsylvania, New Jersey, West Virginia and Maryland. The company’s operations include maintaining local electric distribution networks and owning and operating high-voltage transmission infrastructure across portions of the Midwest and Mid-Atlantic.
About Xcel Energy
Xcel Energy Inc. is a regulated electric and natural gas utility headquartered in Minneapolis, Minnesota. Through its operating companies, it generates, purchases, transmits and distributes electricity, and delivers natural gas to residential, commercial and industrial customers. The company serves customers in eight states: Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Its electric system includes a mix of generation resources, supported by transmission and distribution networks.
Receive News & Ratings for FirstEnergy Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for FirstEnergy and related companies with MarketBeat.com's FREE daily email newsletter.
