Head to Head Review: Consolidated Edison (NYSE:ED) and Algonquin Power & Utilities (NYSE:AQN)

Consolidated Edison (NYSE:ED) and Algonquin Power & Utilities (NYSE:AQN) are both utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Earnings and Valuation

This table compares Consolidated Edison and Algonquin Power & Utilities”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consolidated Edison	$15.26 billion	2.31	$1.82 billion	$5.51	17.72
Algonquin Power & Utilities	$2.32 billion	1.90	-$1.38 billion	($1.80)	-3.18

Consolidated Edison has higher revenue and earnings than Algonquin Power & Utilities. Algonquin Power & Utilities is trading at a lower price-to-earnings ratio than Consolidated Edison, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

66.3% of Consolidated Edison shares are owned by institutional investors. Comparatively, 62.3% of Algonquin Power & Utilities shares are owned by institutional investors. 0.2% of Consolidated Edison shares are owned by insiders. Comparatively, 0.1% of Algonquin Power & Utilities shares are owned 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.

Dividends

Consolidated Edison pays an annual dividend of $3.40 per share and has a dividend yield of 3.5%. Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.5%. Consolidated Edison pays out 61.7% of its earnings in the form of a dividend. Algonquin Power & Utilities pays out -14.4% 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. Consolidated Edison has increased its dividend for 52 consecutive years. Algonquin Power & Utilities is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and price targets for Consolidated Edison and Algonquin Power & Utilities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consolidated Edison	3	6	3	0	2.00
Algonquin Power & Utilities	0	10	1	0	2.09

Consolidated Edison presently has a consensus price target of $105.91, indicating a potential upside of 8.50%. Algonquin Power & Utilities has a consensus price target of $6.36, indicating a potential upside of 11.16%. Given Algonquin Power & Utilities’ stronger consensus rating and higher possible upside, analysts clearly believe Algonquin Power & Utilities is more favorable than Consolidated Edison.

Risk & Volatility

Consolidated Edison has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500. Comparatively, Algonquin Power & Utilities has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Consolidated Edison and Algonquin Power & Utilities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consolidated Edison	11.98%	8.56%	2.78%
Algonquin Power & Utilities	-57.66%	4.76%	1.69%

Summary

Consolidated Edison beats Algonquin Power & Utilities on 12 of the 17 factors compared between the two stocks.

About Consolidated Edison

Consolidated Edison, Inc., through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States. It offers electric services to approximately 3.7 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,530 customers in parts of Manhattan. The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey; and gas to approximately 0.2 million customers in southeastern New York. In addition, it operates 545 circuit miles of transmission lines; 15 transmission substations; 63 distribution substations; 90,051 in-service line transformers; 3,788 pole miles of overhead distribution lines; and 2,314 miles of underground distribution lines, as well as 4,363 miles of mains and 380,870 service lines for natural gas distribution. Further, the company invests in electric and gas transmission projects. It primarily sells electricity to industrial, commercial, residential, and government customers. Consolidated Edison, Inc. was founded in 1823 and is based in New York, New York.

About Algonquin Power & Utilities

Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.