Head-To-Head Comparison: Eversource Energy (NYSE:ES) and RWE (OTCMKTS:RWEOY)

Eversource Energy (NYSE:ES) and RWE (OTCMKTS:RWEOY) are both large-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Dividends

Eversource Energy pays an annual dividend of $3.15 per share and has a dividend yield of 4.7%. RWE pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. Eversource Energy pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RWE pays out 19.0% of its earnings in the form of a dividend. Eversource Energy has raised its dividend for 2 consecutive years. Eversource Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Eversource Energy has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Valuation and Earnings

This table compares Eversource Energy and RWE”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eversource Energy	$13.55 billion	1.88	$1.69 billion	$3.86	17.50
RWE	$19.94 billion	2.27	$3.54 billion	$5.26	11.85

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

Institutional and Insider Ownership

80.0% of Eversource Energy shares are owned by institutional investors. 0.2% of Eversource Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Eversource Energy and RWE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eversource Energy	10.35%	11.33%	2.91%
RWE	21.25%	5.34%	2.10%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Eversource Energy and RWE, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eversource Energy	3	6	4	0	2.08
RWE	0	4	3	1	2.62

Eversource Energy currently has a consensus target price of $72.91, indicating a potential upside of 7.91%. Given Eversource Energy’s higher possible upside, equities analysts clearly believe Eversource Energy is more favorable than RWE.

Summary

Eversource Energy beats RWE on 10 of the 18 factors compared between the two stocks.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.