Critical Contrast: RWE (OTCMKTS:RWEOY) & IDACORP (NYSE:IDA)

IDACORP (NYSE:IDA) and RWE (OTCMKTS:RWEOY) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Earnings and Valuation

This table compares IDACORP and RWE”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IDACORP	$1.83 billion	4.27	$289.17 million	$5.82	24.80
RWE	$26.22 billion	1.64	$5.56 billion	$3.50	16.97

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

Dividends

IDACORP pays an annual dividend of $3.52 per share and has a dividend yield of 2.4%. RWE pays an annual dividend of $0.88 per share and has a dividend yield of 1.5%. IDACORP pays out 60.5% of its earnings in the form of a dividend. RWE pays out 25.1% 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. IDACORP has raised its dividend for 13 consecutive years. IDACORP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

IDACORP has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Institutional and Insider Ownership

89.1% of IDACORP shares are owned by institutional investors. 0.5% of IDACORP shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares IDACORP and RWE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IDACORP	17.59%	9.35%	3.27%
RWE	10.82%	5.42%	2.01%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for IDACORP and RWE, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IDACORP	1	1	8	0	2.70
RWE	0	3	2	0	2.40

IDACORP currently has a consensus target price of $137.67, indicating a potential downside of 4.62%. RWE has a consensus target price of $53.30, indicating a potential downside of 10.24%. Given IDACORP’s stronger consensus rating and higher possible upside, analysts clearly believe IDACORP is more favorable than RWE.

Summary

IDACORP beats RWE on 13 of the 17 factors compared between the two stocks.

About IDACORP

IDACORP, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, purchase, and sale of electric energy in the United States. The company operates 17 hydropower generating plants located in southern Idaho and eastern Oregon; three natural gas-fired plants in southern Idaho; and interests in two coal-fired steam electric generating plants located in Wyoming and Nevada. As of December 31, 2023, it had approximately 4,762 pole-miles of high-voltage transmission lines; 23 step-up transmission substations located at power plants; 21 transmission substations; 11 switching stations; 30 mixed-use transmission and distribution substations; 186 energized distribution substations; and 29,714 pole-miles of distribution lines, and 131 MW of battery storage, as well as provides electric utility services to approximately 633,000 retail customers in southern Idaho and eastern Oregon. The company serves commercial and industrial customers, which involved in food processing, electronics and general manufacturing, agriculture, health care, government, and education. It also invests in housing and other real estate tax credit investments. IDACORP, Inc. was founded in 1915 and is headquartered in Boise, Idaho.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.