Financial Survey: NorthWestern (NWE) & The Competition

NorthWestern (NYSE:NWE) is one of 27 publicly-traded companies in the “Electric & other services combined” industry, but how does it contrast to its competitors? We will compare NorthWestern to similar companies based on the strength of its profitability, institutional ownership, valuation, earnings, risk, analyst recommendations and dividends.

Valuation & Earnings

This table compares NorthWestern and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
NorthWestern	$1.48 billion	$183.01 million	17.32
NorthWestern Competitors	$11.32 billion	$727.67 million	12.04

NorthWestern’s competitors have higher revenue and earnings than NorthWestern. NorthWestern is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares NorthWestern and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NorthWestern	11.67%	6.53%	2.38%
NorthWestern Competitors	7.05%	6.28%	2.72%

Risk and Volatility

NorthWestern has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, NorthWestern’s competitors have a beta of 0.58, suggesting that their average stock price is 42% less volatile than the S&P 500.

Dividends

NorthWestern pays an annual dividend of $2.56 per share and has a dividend yield of 4.9%. NorthWestern pays out 85.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Electric & other services combined” companies pay a dividend yield of 3.9% and pay out 67.5% of their earnings in the form of a dividend. NorthWestern has raised its dividend for 19 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for NorthWestern and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NorthWestern	2	3	3	0	2.13
NorthWestern Competitors	472	2233	1650	8	2.27

NorthWestern presently has a consensus target price of $55.38, indicating a potential upside of 6.57%. As a group, “Electric & other services combined” companies have a potential upside of 10.94%. Given NorthWestern’s competitors stronger consensus rating and higher possible upside, analysts plainly believe NorthWestern has less favorable growth aspects than its competitors.

Institutional and Insider Ownership

96.1% of NorthWestern shares are held by institutional investors. Comparatively, 69.1% of shares of all “Electric & other services combined” companies are held by institutional investors. 0.9% of NorthWestern shares are held by company insiders. Comparatively, 8.0% of shares of all “Electric & other services combined” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

NorthWestern competitors beat NorthWestern on 10 of the 15 factors compared.

NorthWestern Company Profile

NorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and various industrial customers. The company operates through three segments: Electric Utility Operations; Natural Gas Utility Operations; and Other. 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 6,597 miles of electric transmission and 18,534 miles of electric distribution lines with approximately 121 transmission and distribution substations; and 2,235 miles of natural gas transmission and 5,099 miles of natural gas distribution lines with approximately 135 city gate stations in Montana. It also operates 1,308 miles of electric transmission and 2,342 miles of electric distribution lines in South Dakota with approximately 121 transmission and distribution substations; and 55 miles of natural gas transmission and 2,545 miles of natural gas distribution lines in South Dakota and Nebraska. The company serves approximately 764,200 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Corporation was incorporated in 1923 and is based in Sioux Falls, South Dakota.