CenterPoint Energy (NYSE:CNP – Get Free Report) and Xcel Energy (NASDAQ:XEL – Get Free Report) are both large-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Institutional & Insider Ownership
91.8% of CenterPoint Energy shares are held by institutional investors. Comparatively, 78.4% of Xcel Energy shares are held by institutional investors. 0.1% of CenterPoint Energy shares are held by insiders. Comparatively, 0.1% of Xcel Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares CenterPoint Energy and Xcel Energy”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CenterPoint Energy | $8.64 billion | 3.15 | $1.02 billion | $1.58 | 26.36 |
| Xcel Energy | $14.67 billion | 3.18 | $2.02 billion | $3.42 | 23.09 |
Xcel Energy has higher revenue and earnings than CenterPoint Energy. Xcel Energy is trading at a lower price-to-earnings ratio than CenterPoint Energy, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and price targets for CenterPoint Energy and Xcel Energy, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CenterPoint Energy | 1 | 5 | 7 | 0 | 2.46 |
| Xcel Energy | 1 | 1 | 12 | 3 | 3.00 |
CenterPoint Energy presently has a consensus target price of $41.82, suggesting a potential upside of 0.39%. Xcel Energy has a consensus target price of $87.60, suggesting a potential upside of 10.91%. Given Xcel Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Xcel Energy is more favorable than CenterPoint Energy.
Volatility and Risk
CenterPoint Energy has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Xcel Energy has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500.
Profitability
This table compares CenterPoint Energy and Xcel Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CenterPoint Energy | 11.37% | 10.25% | 2.52% |
| Xcel Energy | 13.76% | 10.83% | 2.95% |
Dividends
CenterPoint Energy pays an annual dividend of $0.88 per share and has a dividend yield of 2.1%. Xcel Energy pays an annual dividend of $2.28 per share and has a dividend yield of 2.9%. CenterPoint Energy pays out 55.7% of its earnings in the form of a dividend. Xcel Energy pays out 66.7% 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. CenterPoint Energy has increased its dividend for 5 consecutive years and Xcel Energy has increased its dividend for 22 consecutive years. Xcel Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Xcel Energy beats CenterPoint Energy on 13 of the 18 factors compared between the two stocks.
About CenterPoint Energy
CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company operates through two segments, Electric and Natural Gas. The Electric segment includes electric transmission and distribution services to electric customers and electric generation assets, as well as optimizes assets in the wholesale power market. The Natural Gas segment engages in the intrastate natural gas sales, and natural gas transportation and distribution for residential, commercial, industrial and institutional customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas; permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies; and provides maintenance and repair services of home appliances to customers in Minnesota and home repair protection plans to natural gas customers in Indiana, Mississippi, Ohio, and Texas through a third party. It serves approximately 2,534,730 metered customers; owned 348 substations with transformer capacity of 79,719 megavolt amperes; and owned and operated 217 miles of intrastate pipeline in Louisiana and Texas. The company was founded in 1866 and is headquartered in Houston, Texas.
About Xcel Energy
Xcel Energy Inc., through its subsidiaries, engages in the generation, purchasing, transmission, distribution, and sale of electricity. It operates through Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments. The company generates electricity through wind, nuclear, hydroelectric, biomass, and solar energy sources, as well as coal, natural gas, oil, wood, and refuse-derived fuels. It also purchases, transports, distributes, and sells natural gas to retail customers, as well as transports customer-owned natural gas. In addition, the company develops and leases natural gas pipelines, and storage and compression facilities; and invests in rental housing projects and nonregulated assets, as well as procures equipment for the construction of renewable generation facilities. It serves residential, commercial, and industrial customers in the portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. The company was incorporated in 1909 and is headquartered in Minneapolis, Minnesota.
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