Hydro One (OTCMKTS:HRNNF – Get Free Report) and Exelon (NASDAQ:EXC – Get Free Report) are both large-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.
Earnings and Valuation
This table compares Hydro One and Exelon”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hydro One | $6.47 billion | 3.30 | $958.32 million | $1.71 | 20.84 |
| Exelon | $24.26 billion | 1.78 | $2.77 billion | $2.73 | 15.30 |
Dividends
Hydro One pays an annual dividend of $1.02 per share and has a dividend yield of 2.9%. Exelon pays an annual dividend of $1.68 per share and has a dividend yield of 4.0%. Hydro One pays out 59.6% of its earnings in the form of a dividend. Exelon pays out 61.5% 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. Exelon has raised its dividend for 3 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of current recommendations and price targets for Hydro One and Exelon, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hydro One | 1 | 5 | 1 | 0 | 2.00 |
| Exelon | 1 | 13 | 4 | 0 | 2.17 |
Exelon has a consensus price target of $49.33, indicating a potential upside of 18.14%. Given Exelon’s stronger consensus rating and higher probable upside, analysts plainly believe Exelon is more favorable than Hydro One.
Institutional & Insider Ownership
80.9% of Exelon shares are owned by institutional investors. 0.1% of Exelon shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Hydro One and Exelon’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hydro One | 14.88% | 11.02% | 3.56% |
| Exelon | 10.99% | 9.81% | 2.43% |
Summary
Exelon beats Hydro One on 10 of the 16 factors compared between the two stocks.
About Hydro One
Hydro One Limited, through its subsidiaries, operates as an electricity transmission and distribution company in Ontario. The company operates through three segments: Transmission, Distribution, and Other. It owns and operates approximately 30,000 circuit kilometers of high-voltage transmission lines and approximately 125,000 circuit kilometers primary low-voltage distribution lines. The company serves residential, small business, commercial, and industrial customers, as well as municipal utilities. It also provides telecommunications support services for its transmission and distribution businesses; and information and communications technology services and solutions. The company was incorporated in 2015 and is headquartered in Toronto, Canada.
About Exelon
Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.
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