Critical Analysis: E.On (OTCMKTS:EONGY) and Brookfield Infrastructure Partners (NYSE:BIP)

E.On (OTCMKTS:EONGY) and Brookfield Infrastructure Partners (NYSE:BIP) are both large-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

57.9% of Brookfield Infrastructure Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for E.On and Brookfield Infrastructure Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
E.On	0	5	2	1	2.50
Brookfield Infrastructure Partners	0	3	8	0	2.73

Brookfield Infrastructure Partners has a consensus price target of $45.33, suggesting a potential upside of 18.99%. Given Brookfield Infrastructure Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Brookfield Infrastructure Partners is more favorable than E.On.

Profitability

This table compares E.On and Brookfield Infrastructure Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
E.On	4.49%	11.54%	2.72%
Brookfield Infrastructure Partners	3.51%	2.63%	0.71%

Risk & Volatility

E.On has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Brookfield Infrastructure Partners has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Valuation and Earnings

This table compares E.On and Brookfield Infrastructure Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
E.On	$89.03 billion	0.60	$1.96 billion	$1.50	13.69
Brookfield Infrastructure Partners	$23.10 billion	0.76	$771.00 million	$0.62	61.45

E.On has higher revenue and earnings than Brookfield Infrastructure Partners. E.On is trading at a lower price-to-earnings ratio than Brookfield Infrastructure Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

E.On pays an annual dividend of $0.49 per share and has a dividend yield of 2.4%. Brookfield Infrastructure Partners pays an annual dividend of $1.82 per share and has a dividend yield of 4.8%. E.On pays out 32.7% of its earnings in the form of a dividend. Brookfield Infrastructure Partners pays out 293.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brookfield Infrastructure Partners has increased its dividend for 18 consecutive years. Brookfield Infrastructure Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Brookfield Infrastructure Partners beats E.On on 9 of the 17 factors compared between the two stocks.

About E.On

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, rest of Europe, and internationally. It operates through two segments, Energy Networks and Customer Solutions. The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services. The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities. Additionally, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties. The company was founded in 1923 and is headquartered in Essen, Germany.

About Brookfield Infrastructure Partners

Brookfield Infrastructure Partners L.P. owns and operates utilities, transport, midstream, and data businesses in North and South America, Europe, and the Asia Pacific. The company's Utilities segment operates approximately 2,900 km of electricity transmission lines; 4,200 km of natural gas pipelines; 8.1 million electricity and natural gas connections; and 0.6 million long-term contracted sub-metering services. This segment also offers heating, cooling, and energy solutions; gas distribution; water heaters; and heating, ventilation, and air conditioner rental, as well as other home services. Its Transport segment offers transportation, storage, and handling services for merchandise goods, commodities, and passengers through a network of approximately 22,000 km of track; 5,500 km of track network; 9,800 km of rail; and 3,300 km of motorways. The company's Midstream segment offers natural gas transmission, gathering and processing, and storage services through approximately 15,000 km of natural gas transmission pipelines; 570 billion cubic feet of natural gas storage; 17 natural gas processing plants; and 10,600 km of gas gathering pipelines, as well as 525,000 tonnes polypropylene production capacity. Its Data segment operates approximately 228,000 operational telecom towers; approximately 54,000 kilometers of fiber optic cables; approximately 1 million fiber-to-the-premise connections; two semiconductor manufacturing facilities; and 70 distributed antenna systems, as well as 135 data centers and 750 megawatts of critical load capacity and an additional approximate 670 megawatts of contracted capacity. The company was incorporated in 2007 and is based in Hamilton, Bermuda. Brookfield Infrastructure Partners L.P. operates as a subsidiary of Brookfield Corporation.