Consolidated Edison (NYSE:ED) & Southern (NYSE:SO) Head-To-Head Survey

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

Analyst Ratings

This is a summary of recent ratings for Southern and Consolidated Edison, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern	1	11	6	1	2.37
Consolidated Edison	4	5	3	0	1.92

Southern presently has a consensus price target of $99.66, indicating a potential upside of 4.78%. Consolidated Edison has a consensus price target of $105.08, indicating a potential upside of 7.02%. Given Consolidated Edison’s higher probable upside, analysts clearly believe Consolidated Edison is more favorable than Southern.

Risk & Volatility

Southern has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Consolidated Edison has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Insider & Institutional Ownership

64.1% of Southern shares are held by institutional investors. Comparatively, 66.3% of Consolidated Edison shares are held by institutional investors. 0.2% of Southern shares are held by company insiders. Comparatively, 0.2% of Consolidated Edison 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.

Valuation & Earnings

This table compares Southern and Consolidated Edison”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern	$26.72 billion	3.92	$4.40 billion	$3.89	24.45
Consolidated Edison	$15.26 billion	2.32	$1.82 billion	$5.51	17.82

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

Profitability

This table compares Southern and Consolidated Edison’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern	15.10%	12.09%	3.06%
Consolidated Edison	11.98%	8.56%	2.78%

Dividends

Southern pays an annual dividend of $2.96 per share and has a dividend yield of 3.1%. Consolidated Edison pays an annual dividend of $3.40 per share and has a dividend yield of 3.5%. 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. Consolidated Edison pays out 61.7% of its earnings in the form of a dividend. Southern has raised its dividend for 25 consecutive years and Consolidated Edison has raised its dividend for 52 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Southern beats Consolidated Edison on 11 of the 18 factors compared between the two stocks.

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.

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.