Critical Review: OGE Energy (OGE) versus AES (AES)

OGE Energy (NYSE: OGE) and AES (NYSE:AES) are both mid-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Valuation & Earnings

How to Become a New Pot Stock Millionaire

This table compares OGE Energy and AES’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OGE Energy $2.26 billion 2.81 $619.00 million $3.10 10.26
AES $10.53 billion 0.68 -$1.16 billion ($1.76) -6.16

OGE Energy has higher earnings, but lower revenue than AES. AES is trading at a lower price-to-earnings ratio than OGE Energy, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

63.0% of OGE Energy shares are owned by institutional investors. Comparatively, 93.4% of AES shares are owned by institutional investors. 0.5% of OGE Energy shares are owned by company insiders. Comparatively, 1.2% of AES shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

OGE Energy pays an annual dividend of $1.33 per share and has a dividend yield of 4.2%. AES pays an annual dividend of $0.52 per share and has a dividend yield of 4.8%. OGE Energy pays out 42.9% of its earnings in the form of a dividend. AES pays out -29.5% 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. OGE Energy has raised its dividend for 11 consecutive years and AES has raised its dividend for 5 consecutive years. AES is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares OGE Energy and AES’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OGE Energy 27.38% 10.64% 3.70%
AES -8.77% 16.52% 2.65%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for OGE Energy and AES, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OGE Energy 0 4 4 0 2.50
AES 0 2 3 0 2.60

OGE Energy presently has a consensus target price of $36.50, indicating a potential upside of 14.74%. AES has a consensus target price of $12.70, indicating a potential upside of 17.16%. Given AES’s stronger consensus rating and higher possible upside, analysts plainly believe AES is more favorable than OGE Energy.

Risk & Volatility

OGE Energy has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, AES has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Summary

AES beats OGE Energy on 9 of the 17 factors compared between the two stocks.

OGE Energy Company Profile

OGE Energy Corp. (OGE Energy) is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company operates through two segments: electric utility and natural gas midstream operations. The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through Oklahoma Gas and Electric Company (OG&E). OG&E is an electric utility in Oklahoma and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. The natural gas midstream operations segment represents the Company’s investment in Enable Midstream Partners, LP (Enable) through subsidiaries, and ultimately OGE Enogex Holdings LLC (OGE Holdings). Enable’s assets and operations are organized into two segments: gathering and processing, and transportation and storage.

AES Company Profile

The AES Corporation is a holding company. The Company, through its subsidiaries and affiliates, operates a diversified portfolio of electricity generation and distribution businesses. It is organized into six strategic business units (SBUs): the United States; Andes; Brazil; Mexico, Central America and the Caribbean (MCAC); Europe, and Asia. As of December 31, 2016, its United States SBU had 18 generation facilities and two integrated utilities in the United States. As of December 31, 2016, its Andes SBU had generation facilities in three countries. Its Brazil SBU has generation and distribution businesses, Eletropaulo and Tiete. As of December 31, 2016, its MCAC SBU had a portfolio of distribution businesses and generation facilities, including renewable energy, in five countries. As of December 31, 2016, its Europe SBU had generation facilities in five countries. As of December 31, 2016, its Asia SBU had generation facilities in three countries.

Receive News & Ratings for OGE Energy Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for OGE Energy and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

$0.70 Earnings Per Share Expected for Republic Services  This Quarter
$0.70 Earnings Per Share Expected for Republic Services This Quarter
WEC Energy Group  Receives Media Impact Rating of 0.31
WEC Energy Group Receives Media Impact Rating of 0.31
Welltower  Receiving Favorable Press Coverage, Report Shows
Welltower Receiving Favorable Press Coverage, Report Shows
Somewhat Favorable Media Coverage Somewhat Unlikely to Impact IHS Markit  Stock Price
Somewhat Favorable Media Coverage Somewhat Unlikely to Impact IHS Markit Stock Price
Somewhat Favorable News Coverage Somewhat Unlikely to Impact Coca-Cola European Partners  Stock Price
Somewhat Favorable News Coverage Somewhat Unlikely to Impact Coca-Cola European Partners Stock Price
Karmacoin Price Up 16% Over Last 7 Days
Karmacoin Price Up 16% Over Last 7 Days


© 2006-2018 Ticker Report. Google+.