PPL (NYSE:PPL) vs. Genie Energy (NYSE:GNE) Critical Analysis

Genie Energy (NYSE:GNE) and PPL (NYSE:PPL) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for Genie Energy and PPL, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genie Energy	0	1	0	0	2.00
PPL	0	2	9	1	2.92

PPL has a consensus target price of $41.00, indicating a potential upside of 7.13%. Given PPL’s stronger consensus rating and higher probable upside, analysts clearly believe PPL is more favorable than Genie Energy.

Volatility & Risk

Genie Energy has a beta of 0.11, meaning that its stock price is 89% less volatile than the S&P 500. Comparatively, PPL has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Profitability

This table compares Genie Energy and PPL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genie Energy	1.00%	4.47%	2.16%
PPL	13.06%	9.29%	3.10%

Insider and Institutional Ownership

49.2% of Genie Energy shares are owned by institutional investors. Comparatively, 77.0% of PPL shares are owned by institutional investors. 17.4% of Genie Energy shares are owned by insiders. Comparatively, 0.2% of PPL shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Genie Energy pays an annual dividend of $0.30 per share and has a dividend yield of 2.0%. PPL pays an annual dividend of $1.09 per share and has a dividend yield of 2.8%. Genie Energy pays out 37.5% of its earnings in the form of a dividend. PPL pays out 68.1% 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. PPL has raised its dividend for 3 consecutive years. PPL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genie Energy	$425.20 million	0.92	$12.59 million	$0.80	18.45
PPL	$9.04 billion	3.18	$1.18 billion	$1.60	23.92

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

Summary

PPL beats Genie Energy on 16 of the 18 factors compared between the two stocks.

About Genie Energy

Genie Energy Ltd., through its subsidiaries, engages in the supply of electricity and natural gas to residential and small business customers in the United States and internationally. It operates in two segments, GRE and Genie Renewables. The company also develops, constructs, and operates solar energy projects for commercial and industrial customers, as well as its own portfolio; provides energy brokerage and advisory services; markets community solar energy solutions; and manufactures and distributes solar panel, as well as engages in solar installation design and project management activities. Genie Energy Ltd. was incorporated in 2011 and is headquartered in Newark, New Jersey.

About PPL

PPL Corporation, an energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States. It operates through three segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.