Financial Review: Alliant Energy (NASDAQ:LNT) versus MGE Energy (NASDAQ:MGEE)

Alliant Energy (NASDAQ:LNT) and MGE Energy (NASDAQ:MGEE) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Earnings and Valuation

This table compares Alliant Energy and MGE Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alliant Energy	$3.98 billion	4.19	$690.00 million	$3.24	20.02
MGE Energy	$676.94 million	4.55	$120.57 million	$3.60	23.41

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

Analyst Ratings

This is a summary of current ratings and target prices for Alliant Energy and MGE Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alliant Energy	1	5	4	0	2.30
MGE Energy	1	1	0	0	1.50

Alliant Energy presently has a consensus price target of $65.50, suggesting a potential upside of 0.99%. MGE Energy has a consensus price target of $78.50, suggesting a potential downside of 6.84%. Given Alliant Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Alliant Energy is more favorable than MGE Energy.

Dividends

Alliant Energy pays an annual dividend of $2.03 per share and has a dividend yield of 3.1%. MGE Energy pays an annual dividend of $1.90 per share and has a dividend yield of 2.3%. Alliant Energy pays out 62.7% of its earnings in the form of a dividend. MGE Energy pays out 52.8% 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. Alliant Energy has increased its dividend for 22 consecutive years and MGE Energy has increased its dividend for 49 consecutive years.

Volatility & Risk

Alliant Energy has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, MGE Energy has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Institutional and Insider Ownership

79.9% of Alliant Energy shares are held by institutional investors. Comparatively, 52.6% of MGE Energy shares are held by institutional investors. 0.3% of Alliant Energy shares are held by insiders. Comparatively, 0.2% of MGE Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Alliant Energy and MGE Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alliant Energy	20.07%	12.25%	3.75%
MGE Energy	18.24%	10.58%	4.65%

Summary

Alliant Energy beats MGE Energy on 10 of the 17 factors compared between the two stocks.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the United States. It operates in three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its other subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. It serves retail customers in the farming, agriculture, industrial manufacturing, chemical, packaging, and food industries, as well as wholesale customers comprising municipalities and rural electric cooperatives. In addition, the company owns and operates a short-line rail freight service in Iowa; a Mississippi River barge, rail, and truck freight terminal in Illinois; freight brokerage services; wind turbine blade recycling services; and a rail-served warehouse in Iowa. Further, it holds interests in a natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a wind farm located in Oklahoma. The company was formerly known as Interstate Energy Corp. and changed its name to Alliant Energy Corporation in May 1999. Alliant Energy Corporation was incorporated in 1981 and is headquartered in Madison, Wisconsin.

About MGE Energy

MGE Energy, Inc., through its subsidiaries, operates as a public utility holding company primarily in the United States. It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other segments. The company generates, purchases, and distributes electricity and natural gas in Wisconsin and Iowa; owns and leases electric generating capacity; and plans, constructs, operates, maintains, and expands transmission facilities to provide transmission power services. It generates electricity from coal-fired, gas-fired, and renewable energy sources. As of December 31, 2023, the company owned and operated 835 miles of overhead electric distribution lines; 1,330 miles of underground electric distribution cables; 49 substations with an installed capacity of 1.2 million kVA; and gas facilities, including 3,066 miles of distribution mains, as well as supplied electric service to approximately 163,000 customers. MGE Energy, Inc. founded in 2001 and is headquartered in Madison, Wisconsin.