MGE Energy (NASDAQ:MGEE – Get Free Report) and PPL (NYSE:PPL – Get Free Report) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Insider and Institutional Ownership
52.6% of MGE Energy shares are owned by institutional investors. Comparatively, 77.0% of PPL shares are owned by institutional investors. 0.2% of MGE Energy shares are owned by insiders. Comparatively, 0.2% of PPL shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility and Risk
MGE Energy has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, PPL has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MGE Energy | $676.94 million | 4.49 | $120.57 million | $3.60 | 23.13 |
| PPL | $8.46 billion | 3.21 | $888.00 million | $1.34 | 27.41 |
PPL has higher revenue and earnings than MGE Energy. MGE Energy is trading at a lower price-to-earnings ratio than PPL, indicating that it is currently the more affordable of the two stocks.
Dividends
MGE Energy pays an annual dividend of $1.90 per share and has a dividend yield of 2.3%. PPL pays an annual dividend of $1.09 per share and has a dividend yield of 3.0%. MGE Energy pays out 52.8% of its earnings in the form of a dividend. PPL pays out 81.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGE Energy has raised its dividend for 49 consecutive years and PPL has raised its dividend for 3 consecutive years.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for MGE Energy and PPL, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MGE Energy | 1 | 1 | 0 | 0 | 1.50 |
| PPL | 0 | 1 | 6 | 2 | 3.11 |
MGE Energy presently has a consensus target price of $79.00, indicating a potential downside of 5.12%. PPL has a consensus target price of $36.78, indicating a potential upside of 0.13%. Given PPL’s stronger consensus rating and higher possible upside, analysts clearly believe PPL is more favorable than MGE Energy.
Profitability
This table compares MGE Energy and PPL’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MGE Energy | 18.24% | 10.58% | 4.65% |
| PPL | 11.22% | 8.81% | 3.02% |
Summary
PPL beats MGE Energy on 10 of the 18 factors compared between the two stocks.
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.
About PPL
PPL Corporation, an energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States. It operates through three segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.
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