MGE Energy (NASDAQ:MGEE) & Engie Brasl Ega (OTCMKTS:EGIEY) Critical Analysis

Engie Brasl Ega (OTCMKTS:EGIEY) and MGE Energy (NASDAQ:MGEE) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Profitability

This table compares Engie Brasl Ega and MGE Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Engie Brasl Ega	20.02%	20.68%	5.09%
MGE Energy	18.27%	10.60%	4.59%

Analyst Recommendations

This is a breakdown of recent recommendations for Engie Brasl Ega and MGE Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Engie Brasl Ega	1	0	0	0	1.00
MGE Energy	1	2	0	0	1.67

MGE Energy has a consensus price target of $78.00, indicating a potential downside of 3.83%. Given MGE Energy’s stronger consensus rating and higher probable upside, analysts plainly believe MGE Energy is more favorable than Engie Brasl Ega.

Valuation and Earnings

This table compares Engie Brasl Ega and MGE Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Engie Brasl Ega	$2.30 billion	N/A	$462.46 million	$0.40	15.90
MGE Energy	$743.65 million	3.99	$135.89 million	$3.72	21.80

Engie Brasl Ega has higher revenue and earnings than MGE Energy. Engie Brasl Ega is trading at a lower price-to-earnings ratio than MGE Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Engie Brasl Ega pays an annual dividend of $0.21 per share and has a dividend yield of 3.3%. MGE Energy pays an annual dividend of $1.90 per share and has a dividend yield of 2.3%. Engie Brasl Ega pays out 52.5% of its earnings in the form of a dividend. MGE Energy pays out 51.1% 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 increased its dividend for 49 consecutive years.

Insider & Institutional Ownership

52.6% of MGE Energy shares are owned by institutional investors. 0.2% of MGE Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Engie Brasl Ega has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, MGE Energy has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Summary

MGE Energy beats Engie Brasl Ega on 9 of the 15 factors compared between the two stocks.

About Engie Brasl Ega

Engie Brasil Energia S.A., together with its subsidiaries, generates, sells, and trades in electrical energy in Brazil. The company operates 76 plants, including 11 hydroelectric power plants; 1 thermal power plants; 50 wind farms; 3 biomass; 9 photovoltaic and solar power plant; and 2 small hydroelectric plants. As of December 31, 2022, it had an installed capacity of 8,453.3 megawatts. The company also transports natural gas through 4,500 km of gas pipelines. In addition, it manufactures, wholesales, retails, operates, and maintains solar panels. The company was formerly known as Tractebel Energia S.A. and changed its name to Engie Brasil Energia S.A. in July 2016. The company was founded in 2005 and is headquartered in Florianópolis, Brazil. Engie Brasil Energia S.A. operates as a subsidiary of ENGIE Brasil Participações Ltda.

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.