Contrasting Eversource Energy (NYSE:ES) & E.On (OTCMKTS:EONGY)

Eversource Energy (NYSE:ES) and E.On (OTCMKTS:EONGY) are both large-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Institutional & Insider Ownership

80.0% of Eversource Energy shares are held by institutional investors. 0.2% of Eversource Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Eversource Energy has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, E.On has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Eversource Energy and E.On”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eversource Energy	$12.99 billion	2.09	$811.65 million	$2.33	31.41
E.On	$86.71 billion	0.57	$4.90 billion	$1.28	14.86

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Eversource Energy and E.On, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eversource Energy	3	5	4	0	2.08
E.On	0	5	2	1	2.50

Eversource Energy currently has a consensus target price of $67.67, indicating a potential downside of 7.55%. Given Eversource Energy’s higher probable upside, analysts clearly believe Eversource Energy is more favorable than E.On.

Profitability

This table compares Eversource Energy and E.On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eversource Energy	6.60%	11.00%	2.81%
E.On	3.81%	12.59%	2.72%

Dividends

Eversource Energy pays an annual dividend of $3.01 per share and has a dividend yield of 4.1%. E.On pays an annual dividend of $0.46 per share and has a dividend yield of 2.4%. Eversource Energy pays out 129.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. E.On pays out 35.9% of its earnings in the form of a dividend. Eversource Energy has increased its dividend for 2 consecutive years. Eversource Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Eversource Energy beats E.On on 11 of the 18 factors compared between the two stocks.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.

About E.On

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, rest of Europe, and internationally. It operates through two segments, Energy Networks and Customer Solutions. The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services. The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities. Additionally, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties. The company was founded in 1923 and is headquartered in Essen, Germany.