MGE Energy (NASDAQ:MGEE – Get Free Report) and Algonquin Power & Utilities (NYSE:AQN – Get Free Report) are both mid-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.
Volatility and Risk
MGE Energy has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Algonquin Power & Utilities has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.
Institutional and Insider Ownership
52.6% of MGE Energy shares are owned by institutional investors. Comparatively, 62.3% of Algonquin Power & Utilities shares are owned by institutional investors. 0.2% of MGE Energy shares are owned by insiders. Comparatively, 0.1% of Algonquin Power & Utilities shares are owned by 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.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MGE Energy | 1 | 2 | 0 | 0 | 1.67 |
| Algonquin Power & Utilities | 1 | 5 | 5 | 2 | 2.62 |
MGE Energy currently has a consensus target price of $79.00, suggesting a potential downside of 0.15%. Algonquin Power & Utilities has a consensus target price of $6.70, suggesting a potential upside of 0.98%. Given Algonquin Power & Utilities’ stronger consensus rating and higher possible upside, analysts plainly believe Algonquin Power & Utilities is more favorable than MGE Energy.
Dividends
MGE Energy pays an annual dividend of $1.90 per share and has a dividend yield of 2.4%. Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 3.9%. MGE Energy pays out 51.5% of its earnings in the form of a dividend. Algonquin Power & Utilities pays out -650.0% 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. MGE Energy has raised its dividend for 49 consecutive years. Algonquin Power & Utilities is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares MGE Energy and Algonquin Power & Utilities’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MGE Energy | 18.55% | 10.65% | 4.67% |
| Algonquin Power & Utilities | -1.11% | 5.14% | 1.84% |
Valuation & Earnings
This table compares MGE Energy and Algonquin Power & Utilities”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MGE Energy | $676.94 million | 4.27 | $120.57 million | $3.69 | 21.44 |
| Algonquin Power & Utilities | $2.32 billion | 2.20 | -$1.38 billion | ($0.04) | -165.88 |
MGE Energy has higher earnings, but lower revenue than Algonquin Power & Utilities. Algonquin Power & Utilities is trading at a lower price-to-earnings ratio than MGE Energy, indicating that it is currently the more affordable of the two stocks.
Summary
MGE Energy beats Algonquin Power & Utilities 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 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.
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