Entergy (NYSE:ETR) versus Ameren (NYSE:AEE) Financial Comparison

Entergy (NYSE:ETR) and Ameren (NYSE:AEE) are both large-cap utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Valuation and Earnings

This table compares Entergy and Ameren”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Entergy	$12.95 billion	4.09	$1.77 billion	$3.91	29.57
Ameren	$8.80 billion	3.52	$1.46 billion	$5.35	20.92

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

Insider and Institutional Ownership

88.1% of Entergy shares are owned by institutional investors. Comparatively, 79.1% of Ameren shares are owned by institutional investors. 0.2% of Entergy shares are owned by insiders. Comparatively, 0.3% of Ameren shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Entergy pays an annual dividend of $2.56 per share and has a dividend yield of 2.2%. Ameren pays an annual dividend of $3.00 per share and has a dividend yield of 2.7%. Entergy pays out 65.5% of its earnings in the form of a dividend. Ameren pays out 56.1% 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. Entergy has raised its dividend for 10 consecutive years and Ameren has raised its dividend for 12 consecutive years. Ameren is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Entergy has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Ameren has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Entergy and Ameren, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Entergy	1	4	14	1	2.75
Ameren	1	6	7	0	2.43

Entergy currently has a consensus target price of $110.67, indicating a potential downside of 4.27%. Ameren has a consensus target price of $114.92, indicating a potential upside of 2.69%. Given Ameren’s higher possible upside, analysts clearly believe Ameren is more favorable than Entergy.

Profitability

This table compares Entergy and Ameren’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Entergy	13.66%	10.89%	2.56%
Ameren	16.55%	10.69%	2.91%

Summary

Entergy beats Ameren on 10 of the 18 factors compared between the two stocks.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and retail distribution of electricity in the United States. It generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, including the City of New Orleans; and distributes natural gas. It also engages in the ownership of interests in non-nuclear power plants that sell electric power to wholesale customers, as well as provides decommissioning services to other nuclear power plant owners. It generates electricity through gas, nuclear, coal, hydro, and solar power sources. The company sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company’s power plants have approximately 24,000 megawatts of electric generating capacity. It delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1913 and is headquartered in New Orleans, Louisiana.

About Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.