Head-To-Head Contrast: Edison International (EIX) & CenterPoint Energy (CNP)

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

Dividends

Edison International pays an annual dividend of $2.45 per share and has a dividend yield of 4.2%. CenterPoint Energy pays an annual dividend of $1.11 per share and has a dividend yield of 3.6%. Edison International pays out 54.4% of its earnings in the form of a dividend. CenterPoint Energy pays out 81.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Edison International has raised its dividend for 14 consecutive years and CenterPoint Energy has raised its dividend for 13 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Edison International and CenterPoint Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Edison International 2 4 7 0 2.38
CenterPoint Energy 0 4 7 0 2.64

Edison International presently has a consensus price target of $66.95, suggesting a potential upside of 14.61%. CenterPoint Energy has a consensus price target of $30.20, suggesting a potential downside of 1.92%. Given Edison International’s higher possible upside, research analysts plainly believe Edison International is more favorable than CenterPoint Energy.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Edison International $12.32 billion 1.54 $689.00 million $4.50 12.98
CenterPoint Energy $9.61 billion 1.61 $1.79 billion $1.37 22.47

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

Insider & Institutional Ownership

83.9% of Edison International shares are held by institutional investors. Comparatively, 79.6% of CenterPoint Energy shares are held by institutional investors. 0.4% of Edison International shares are held by insiders. Comparatively, 0.2% of CenterPoint Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Edison International and CenterPoint Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Edison International 4.47% 10.61% 2.82%
CenterPoint Energy 15.15% 14.40% 3.05%

Risk and Volatility

Edison International has a beta of -0.04, meaning that its stock price is 104% less volatile than the S&P 500. Comparatively, CenterPoint Energy has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Edison International Company Profile

Edison International, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in the United States. It generates electricity through hydroelectric, diesel/liquid petroleum gas, natural gas, nuclear, and photovoltaic sources. The company supplies electricity primarily to residential, commercial, industrial, agricultural, and other customers, as well as public authorities through transmission and distribution networks. Its transmission facilities consist of lines ranging from 33 kV to 500 kV and substations; and distribution system comprises approximately 53,000 line miles of overhead lines, 38,000 line miles of underground lines, and 800 substations located in California. The company serves approximately 5 million customers. Edison International was founded in 1886 and is based in Rosemead, California.

CenterPoint Energy Company Profile

CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company's Electric Transmission & Distribution segment offers electric transmission and distribution services to retail electric providers, municipalities, electric cooperatives, and other distribution companies. As of December 31, 2017, this segment owned 28,883 pole miles of overhead distribution lines and 24,662 circuit miles of underground distribution lines; and 235 substations with a transformer capacity of 64,924 megavolt amperes, as well as operated 14 regional service centers. Its Natural Gas Distribution segment sells regulated intrastate natural gas; provides natural gas transportation and storage services for residential, commercial, industrial, and transportation customers; and offers unregulated services comprising residential appliance repair and maintenance services. As of December 31, 2017, this segment owned approximately 75,000 linear miles of natural gas distribution mains. The company's Energy Services segment provides physical natural gas supplies primarily to commercial and industrial customers, and electric and natural gas utilities; natural gas management services; and physical delivery services, as well as procures and optimizes transportation and storage assets. This segment owns and operates approximately 200 miles of intrastate pipelines; and leases transportation capacity on various interstate and intrastate pipelines, and storage. Its Midstream Investments segment offers natural gas and crude oil gathering, and natural gas processing services to its producer customers; and interstate and intrastate natural gas pipeline transportation and storage services to its producer, power plant, local distribution company, and industrial end-user customers. The company was founded in 1882 and is based in Houston, Texas.

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