Comparing Pinnacle West Capital (NYSE:PNW) & Evergy (NASDAQ:EVRG)

Evergy (NASDAQ:EVRG) and Pinnacle West Capital (NYSE:PNW) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Dividends

Evergy pays an annual dividend of $2.78 per share and has a dividend yield of 3.3%. Pinnacle West Capital pays an annual dividend of $3.64 per share and has a dividend yield of 3.6%. Evergy pays out 73.7% of its earnings in the form of a dividend. Pinnacle West Capital pays out 67.8% 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. Evergy has increased its dividend for 20 consecutive years. Pinnacle West Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Evergy and Pinnacle West Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evergy	14.63%	9.09%	2.75%
Pinnacle West Capital	11.99%	9.27%	2.18%

Insider and Institutional Ownership

87.2% of Evergy shares are held by institutional investors. Comparatively, 91.5% of Pinnacle West Capital shares are held by institutional investors. 1.5% of Evergy shares are held by company insiders. Comparatively, 0.2% of Pinnacle West Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Evergy has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500. Comparatively, Pinnacle West Capital has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500.

Earnings & Valuation

This table compares Evergy and Pinnacle West Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evergy	$5.96 billion	3.24	$855.60 million	$3.77	22.26
Pinnacle West Capital	$5.34 billion	2.30	$616.53 million	$5.37	18.90

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Evergy and Pinnacle West Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evergy	0	3	8	0	2.73
Pinnacle West Capital	0	12	3	0	2.20

Evergy presently has a consensus price target of $90.60, suggesting a potential upside of 7.98%. Pinnacle West Capital has a consensus price target of $104.07, suggesting a potential upside of 2.57%. Given Evergy’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Evergy is more favorable than Pinnacle West Capital.

Summary

Evergy beats Pinnacle West Capital on 12 of the 17 factors compared between the two stocks.

About Evergy

Evergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.

About Pinnacle West Capital

Pinnacle West Capital Corporation, through its subsidiary, provides retail and wholesale electric services primarily in the state of Arizona. The company engages in the generation, transmission, and distribution of electricity using coal, nuclear, gas, oil, and solar generating facilities. Its transmission facilities include overhead lines and underground lines; and distribution facilities consist of overhead lines and underground primary cables. The company also owns and maintains transmission and distribution substations; and owns energy storage facilities. Pinnacle West Capital Corporation was incorporated in 1985 and is headquartered in Phoenix, Arizona.