Reviewing Centrica (OTCMKTS:CPYYY) & Spire (NYSE:SR)

Centrica (OTCMKTS:CPYYY) and Spire (NYSE:SR) are both utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Centrica and Spire, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centrica	0	2	1	0	2.33
Spire	1	5	3	1	2.40

Spire has a consensus price target of $78.60, indicating a potential upside of 5.83%. Given Spire’s stronger consensus rating and higher possible upside, analysts clearly believe Spire is more favorable than Centrica.

Dividends

Centrica pays an annual dividend of $0.30 per share and has a dividend yield of 3.4%. Spire pays an annual dividend of $3.14 per share and has a dividend yield of 4.2%. Spire pays out 77.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spire has increased its dividend for 22 consecutive years. Spire is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Centrica and Spire’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Centrica	N/A	N/A	N/A
Spire	10.22%	8.49%	2.39%

Valuation and Earnings

This table compares Centrica and Spire”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centrica	$21.55 billion	0.50	$1.70 billion	N/A	N/A
Spire	$2.59 billion	1.69	$250.90 million	$4.06	18.29

Centrica has higher revenue and earnings than Spire.

Institutional and Insider Ownership

87.4% of Spire shares are held by institutional investors. 2.3% of Spire shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Centrica has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Spire has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Summary

Spire beats Centrica on 12 of the 16 factors compared between the two stocks.

About Centrica

Centrica plc operates as an integrated energy company in the United Kingdom, Ireland, Scandinavia, North America, and internationally. The company operates through British Gas Services & Solutions, British Gas Energy, Centrica Business Solutions, Bord Gáis Energy, Centrica Energy, and Upstream segments. It supplies gas and electricity to residential, commercial, industrial customers, and small businesses, as well as offers energy-related services; and generates power from nuclear assets. The company also provides installation, repair, and maintenance services for central heating, ventilation, and air conditioning systems, as well as offers breakdown services. In addition, it is involved in the procurement, trading, and optimization of energy; procurement and sale of LNG; development and operation of large-scale power assets; building of solar farm and connecting to grid; and supply of energy efficiency solutions and technologies. Further, the company produces and processes gas and oil; constructs, owns, and exploits infrastructure; offers central heating, boiler and controls, plumbing and drains, and electrical appliance insurance covers; and engages in the social enterprise investment fund activities. Additionally, it provides metering assets and services, vehicle leasing, and energy management products and services; constructs battery storage and gas peakers; and operates a gas storage and franchise network. The company was formerly known as Yieldtop plc and changed its name to Centrica plc in December 1996. Centrica plc was founded in 1812 and is based in Windsor, the United Kingdom.

About Spire

Spire Inc., together with its subsidiaries, engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates through three segments: Gas Utility, Gas Marketing, and Midstream. It is also involved in the marketing of natural gas and related services; and transportation and storage of natural gas. In addition, the company engages in the operation of propane through its propane pipeline, risk management, and other activities. The company was formerly known as The Laclede Group, Inc. and changed its name to Spire Inc. in April 2016. Spire Inc. was founded in 1857 and is based in Saint Louis, Missouri.