Head-To-Head Survey: Power Assets (OTCMKTS:HGKGY) & Southern (NYSE:SO)

Power Assets (OTCMKTS:HGKGY) and Southern (NYSE:SO) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

64.1% of Southern shares are held by institutional investors. 1.0% of Power Assets shares are held by company insiders. Comparatively, 0.2% of Southern shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Power Assets pays an annual dividend of $0.16 per share and has a dividend yield of 2.6%. Southern pays an annual dividend of $2.96 per share and has a dividend yield of 3.0%. Southern pays out 76.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southern has increased its dividend for 25 consecutive years. Southern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Power Assets and Southern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Power Assets	N/A	N/A	N/A
Southern	15.10%	12.09%	3.06%

Volatility & Risk

Power Assets has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500. Comparatively, Southern has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Earnings & Valuation

This table compares Power Assets and Southern”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Power Assets	$117.77 million	112.66	$784.46 million	N/A	N/A
Southern	$26.72 billion	4.04	$4.40 billion	$3.89	25.25

Southern has higher revenue and earnings than Power Assets.

Analyst Ratings

This is a summary of current recommendations and price targets for Power Assets and Southern, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Power Assets	0	0	0	0	0.00
Southern	1	9	4	0	2.21

Southern has a consensus target price of $96.31, suggesting a potential downside of 1.96%. Given Southern’s stronger consensus rating and higher probable upside, analysts clearly believe Southern is more favorable than Power Assets.

Summary

Southern beats Power Assets on 12 of the 15 factors compared between the two stocks.

About Power Assets

Power Assets Holdings Limited, an investment holding company, engages in the generation, transmission, and distribution of electricity in Hong Kong, the United Kingdom, Australia, Mainland China, and internationally. It generates energy from thermal, renewable energy, and waste sources. The company also transmits and distributes oil and gas; and provides trust administration and management services. It has a generation capacity of 879 MW renewable energy/energy from waste, 5,262 MW gas fired, and 3,567 MW coal/oil fired; and operates 114,900 km of gas/oil pipeline, as well as 388,200 km of power network serving 19,790,000 customers. The company was formerly known as Hongkong Electric Holdings Limited and changed its name to Power Assets Holdings Limited in February 2011. Power Assets Holdings Limited was founded in 1889 and is based in Central, Hong Kong.

About Southern

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations. In addition, it owns and operates nuclear, coal, hydro, cogeneration, solar, wind, battery storage, and fuel cell facilities. Further, the constructs, operates, and maintains approximately 77,900 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.9 million electric and gas utility customers. Further, it develops distributed energy and resilience solutions; deploys microgrids for commercial, industrial, governmental, and utility customers; and offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.