Head-To-Head Review: Public Service Enterprise Group (PEG) vs. Entergy Corporation (ETR)

Public Service Enterprise Group (NYSE: PEG) and Entergy Corporation (NYSE:ETR) are both large-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Public Service Enterprise Group and Entergy Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Public Service Enterprise Group 0 6 8 0 2.57
Entergy Corporation 0 9 3 0 2.25

Public Service Enterprise Group currently has a consensus target price of $50.23, indicating a potential upside of 1.49%. Entergy Corporation has a consensus target price of $82.42, indicating a potential downside of 5.02%. Given Public Service Enterprise Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Public Service Enterprise Group is more favorable than Entergy Corporation.

Dividends

Public Service Enterprise Group pays an annual dividend of $1.72 per share and has a dividend yield of 3.5%. Entergy Corporation pays an annual dividend of $3.48 per share and has a dividend yield of 4.0%. Public Service Enterprise Group pays out 193.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Entergy Corporation pays out -70.4% of its earnings in the form of a dividend. Public Service Enterprise Group has increased its dividend for 5 consecutive years and Entergy Corporation has increased its dividend for 2 consecutive years. Entergy Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

65.9% of Public Service Enterprise Group shares are owned by institutional investors. Comparatively, 84.7% of Entergy Corporation shares are owned by institutional investors. 0.6% of Public Service Enterprise Group shares are owned by insiders. Comparatively, 0.2% of Entergy Corporation 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.

Profitability

This table compares Public Service Enterprise Group and Entergy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Public Service Enterprise Group 4.88% 11.46% 3.77%
Entergy Corporation -7.82% 14.76% 2.67%

Volatility & Risk

Public Service Enterprise Group has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Entergy Corporation has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Earnings & Valuation

This table compares Public Service Enterprise Group and Entergy Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Public Service Enterprise Group $9.27 billion 2.70 $3.60 billion $0.89 55.61
Entergy Corporation $10.98 billion 1.42 $3.56 billion ($4.94) -17.56

Public Service Enterprise Group has higher revenue, but lower earnings than Entergy Corporation. Entergy Corporation is trading at a lower price-to-earnings ratio than Public Service Enterprise Group, indicating that it is currently the more affordable of the two stocks.

Summary

Public Service Enterprise Group beats Entergy Corporation on 10 of the 16 factors compared between the two stocks.

About Public Service Enterprise Group

Public Service Enterprise Group Incorporated (PSEG) is a holding company. The Company is an energy company with operations located primarily in the Northeastern and Mid-Atlantic United States. The Company’s segments include Public Service Electric and Gas Company (PSE&G), PSEG Power LLC (Power) and Other. PSEG is engaged in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSE&G is also the provider of last resort for gas and electric commodity service for end users in its service territory. Power is a multi-regional energy supply company that integrates the operations of its merchant nuclear and fossil generating assets with its power marketing businesses through energy sales in energy markets and fuel supply functions primarily in the Northeast and Mid-Atlantic United States through its principal subsidiaries. In addition, Power owns and operates solar generation in various states.

About Entergy Corporation

Entergy Corporation is a holding company. The Company is an integrated energy company engaged in electric power production and retail electric distribution operations. The Company operates through two business segments: Utility and Entergy Wholesale Commodities. The Utility segment includes the generation, transmission, distribution and sale of electric power to retail and wholesale customers in areas of Arkansas, Mississippi, Texas and Louisiana, including the City of New Orleans and operates a natural gas distribution business. The Entergy Wholesale Commodities segment includes the ownership, operation and decommissioning of nuclear power plants located in the northern United States and the sale of the electric power produced by its operating plants to wholesale customers. As of December 31, 2016, the Company owned and operated power plants with over 30,000 megawatts of aggregate electric generating capacity, including approximately 10,000 megawatts of nuclear-fueled capacity.

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