Contrasting FirstEnergy (NYSE:FE) & Evergy (NASDAQ:EVRG)

FirstEnergy (NYSE:FE) and Evergy (NASDAQ:EVRG) are both large-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Profitability

This table compares FirstEnergy and Evergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstEnergy	9.31%	11.31%	2.99%
Evergy	14.29%	8.62%	2.66%

Volatility & Risk

FirstEnergy has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Evergy has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Insider and Institutional Ownership

89.4% of FirstEnergy shares are held by institutional investors. Comparatively, 87.2% of Evergy shares are held by institutional investors. 0.2% of FirstEnergy shares are held by company insiders. Comparatively, 1.4% of Evergy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for FirstEnergy and Evergy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstEnergy	0	8	7	0	2.47
Evergy	0	0	8	1	3.11

FirstEnergy currently has a consensus target price of $46.31, indicating a potential upside of 6.14%. Evergy has a consensus target price of $74.44, indicating a potential upside of 3.08%. Given FirstEnergy’s higher probable upside, equities analysts clearly believe FirstEnergy is more favorable than Evergy.

Valuation and Earnings

This table compares FirstEnergy and Evergy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstEnergy	$13.47 billion	1.87	$978.00 million	$2.26	19.31
Evergy	$5.85 billion	2.84	$873.50 million	$3.64	19.84

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

Dividends

FirstEnergy pays an annual dividend of $1.78 per share and has a dividend yield of 4.1%. Evergy pays an annual dividend of $2.67 per share and has a dividend yield of 3.7%. FirstEnergy pays out 78.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Evergy pays out 73.4% of its earnings in the form of a dividend. FirstEnergy has increased its dividend for 3 consecutive years and Evergy has increased its dividend for 20 consecutive years.

Summary

Evergy beats FirstEnergy on 11 of the 18 factors compared between the two stocks.

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.

About Evergy

Evergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.