Analyzing Southern (NYSE:SO) and Alliant Energy (NASDAQ:LNT)

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

Insider and Institutional Ownership

79.9% of Alliant Energy shares are owned by institutional investors. Comparatively, 64.1% of Southern shares are owned by institutional investors. 0.3% of Alliant Energy shares are owned by insiders. Comparatively, 0.2% of Southern 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.

Dividends

Alliant Energy pays an annual dividend of $2.14 per share and has a dividend yield of 3.0%. Southern pays an annual dividend of $2.96 per share and has a dividend yield of 3.1%. Alliant Energy pays out 67.3% of its earnings in the form of a dividend. Southern pays out 73.3% 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. Alliant Energy has increased its dividend for 22 consecutive years and Southern has increased its dividend for 25 consecutive years. Southern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Alliant Energy and Southern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alliant Energy	19.14%	12.02%	3.65%
Southern	15.42%	12.52%	3.14%

Volatility and Risk

Alliant Energy has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Southern has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alliant Energy	$3.98 billion	4.60	$690.00 million	$3.18	22.39
Southern	$28.91 billion	3.62	$4.40 billion	$4.04	23.50

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

Analyst Recommendations

This is a summary of current ratings for Alliant Energy and Southern, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alliant Energy	0	3	8	0	2.73
Southern	3	12	4	0	2.05

Alliant Energy presently has a consensus target price of $71.13, suggesting a potential downside of 0.09%. Southern has a consensus target price of $94.91, suggesting a potential downside of 0.02%. Given Southern’s higher possible upside, analysts clearly believe Southern is more favorable than Alliant Energy.

Summary

Alliant Energy beats Southern on 9 of the 17 factors compared between the two stocks.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the United States. It operates in three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its other subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. It serves retail customers in the farming, agriculture, industrial manufacturing, chemical, packaging, and food industries, as well as wholesale customers comprising municipalities and rural electric cooperatives. In addition, the company owns and operates a short-line rail freight service in Iowa; a Mississippi River barge, rail, and truck freight terminal in Illinois; freight brokerage services; wind turbine blade recycling services; and a rail-served warehouse in Iowa. Further, it holds interests in a natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a wind farm located in Oklahoma. The company was formerly known as Interstate Energy Corp. and changed its name to Alliant Energy Corporation in May 1999. Alliant Energy Corporation was incorporated in 1981 and is headquartered in Madison, Wisconsin.

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.