Power Assets (OTCMKTS:HGKGY – Get Free Report) and NorthWestern (NASDAQ:NWE – Get Free Report) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.
Volatility and Risk
Power Assets has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, NorthWestern has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.
Insider and Institutional Ownership
96.1% of NorthWestern shares are owned by institutional investors. 1.0% of Power Assets shares are owned by company insiders. Comparatively, 0.6% of NorthWestern shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Power Assets | N/A | N/A | N/A |
| NorthWestern | 10.13% | 8.03% | 2.73% |
Valuation and Earnings
This table compares Power Assets and NorthWestern”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Power Assets | $98.89 million | 160.55 | $800.08 million | N/A | N/A |
| NorthWestern | $1.61 billion | 2.67 | $181.09 million | $2.77 | 25.22 |
Power Assets has higher earnings, but lower revenue than NorthWestern.
Dividends
Power Assets pays an annual dividend of $0.48 per share and has a dividend yield of 6.4%. NorthWestern pays an annual dividend of $2.68 per share and has a dividend yield of 3.8%. NorthWestern pays out 96.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NorthWestern has increased its dividend for 21 consecutive years.
Analyst Recommendations
This is a summary of recent ratings for Power Assets and NorthWestern, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Power Assets | 0 | 0 | 0 | 0 | 0.00 |
| NorthWestern | 0 | 3 | 3 | 0 | 2.50 |
NorthWestern has a consensus target price of $73.30, indicating a potential upside of 4.92%. Given NorthWestern’s stronger consensus rating and higher possible upside, analysts clearly believe NorthWestern is more favorable than Power Assets.
Summary
NorthWestern beats Power Assets on 10 of the 15 factors compared between the two stocks.
About Power Assets
Power Assets Holdings Limited, an investment holding company, engages in the generation, transmission, and distribution of electricity in Hong Kong, the United Kingdom, Australia, Mainland China, and internationally. It generates energy from thermal, renewable energy, and waste sources. The company also transmits and distributes oil and gas; and provides trust administration and management services. It has a generation capacity of 879 MW renewable energy/energy from waste, 5,262 MW gas fired, and 3,567 MW coal/oil fired; and operates 114,900 km of gas/oil pipeline, as well as 388,200 km of power network serving 19,790,000 customers. The company was formerly known as Hongkong Electric Holdings Limited and changed its name to Power Assets Holdings Limited in February 2011. Power Assets Holdings Limited was founded in 1889 and is based in Central, Hong Kong.
About NorthWestern
NorthWestern Energy Group, Inc. provides electricity and natural gas to residential, commercial, and various industrial customers. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,600 miles of electric transmission and 18,674 miles of electric distribution lines with approximately 395 transmission and distribution substations; and 2,235 miles of natural gas transmission and 5,155 miles of natural gas distribution lines with approximately 133 city gate stations in Montana. It also operates 1,310 miles of electric transmission and 2,365 miles of electric distribution lines in South Dakota with approximately 124 transmission and distribution substations; and 55 miles of natural gas transmission and 2,573 miles of natural gas distribution lines in South Dakota and Nebraska. The company provides electricity and/or natural gas to approximately 775,300 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Energy Group, Inc. was founded in 1923 and is based in Sioux Falls, South Dakota.
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