Financial Contrast: RWE (OTCMKTS:RWEOY) vs. Exelon (NASDAQ:EXC)

RWE (OTCMKTS:RWEOY) and Exelon (NASDAQ:EXC) are both large-cap utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Institutional and Insider Ownership

80.9% of Exelon shares are owned by institutional investors. 0.1% of Exelon shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares RWE and Exelon”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RWE	$19.94 billion	2.46	$3.54 billion	$4.88	13.82
Exelon	$24.26 billion	2.11	$2.77 billion	$2.73	18.33

RWE has higher earnings, but lower revenue than Exelon. RWE is trading at a lower price-to-earnings ratio than Exelon, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for RWE and Exelon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RWE	0	3	2	1	2.67
Exelon	2	7	8	0	2.35

RWE currently has a consensus price target of $53.30, suggesting a potential downside of 20.98%. Exelon has a consensus price target of $50.93, suggesting a potential upside of 1.78%. Given Exelon’s higher probable upside, analysts clearly believe Exelon is more favorable than RWE.

Profitability

This table compares RWE and Exelon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RWE	17.96%	4.96%	1.88%
Exelon	11.41%	9.97%	2.48%

Dividends

RWE pays an annual dividend of $0.87 per share and has a dividend yield of 1.3%. Exelon pays an annual dividend of $1.68 per share and has a dividend yield of 3.4%. RWE pays out 17.8% of its earnings in the form of a dividend. Exelon pays out 61.5% 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. Exelon has raised its dividend for 3 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

RWE has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Exelon has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Summary

Exelon beats RWE on 10 of the 18 factors compared between the two stocks.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.

About Exelon

Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.