Analyzing El Paso Electric (EE) & Its Peers

El Paso Electric (NYSE: EE) is one of 85 publicly-traded companies in the “Electric Utilities” industry, but how does it contrast to its peers? We will compare El Paso Electric to similar companies based on the strength of its valuation, profitability, institutional ownership, dividends, analyst recommendations, earnings and risk.

Institutional and Insider Ownership

98.2% of El Paso Electric shares are owned by institutional investors. Comparatively, 65.6% of shares of all “Electric Utilities” companies are owned by institutional investors. 1.3% of El Paso Electric shares are owned by company insiders. Comparatively, 2.7% of shares of all “Electric Utilities” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares El Paso Electric and its peers gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
El Paso Electric $886.94 million $96.76 million 24.00
El Paso Electric Competitors $7.66 billion $831.80 million 20.92

El Paso Electric’s peers have higher revenue and earnings than El Paso Electric. El Paso Electric is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and price targets for El Paso Electric and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
El Paso Electric 1 2 1 0 2.00
El Paso Electric Competitors 529 2937 2359 41 2.33

El Paso Electric presently has a consensus target price of $55.50, suggesting a potential downside of 3.65%. As a group, “Electric Utilities” companies have a potential upside of 7.24%. Given El Paso Electric’s peers stronger consensus rating and higher probable upside, analysts clearly believe El Paso Electric has less favorable growth aspects than its peers.

Profitability

This table compares El Paso Electric and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
El Paso Electric 10.13% 8.56% 2.69%
El Paso Electric Competitors -10.63% 0.96% 0.39%

Risk & Volatility

El Paso Electric has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, El Paso Electric’s peers have a beta of 0.67, indicating that their average stock price is 33% less volatile than the S&P 500.

Dividends

El Paso Electric pays an annual dividend of $1.34 per share and has a dividend yield of 2.3%. El Paso Electric pays out 55.8% of its earnings in the form of a dividend. As a group, “Electric Utilities” companies pay a dividend yield of 3.1% and pay out 105.4% of their earnings in the form of a dividend. El Paso Electric has raised its dividend for 5 consecutive years.

Summary

El Paso Electric peers beat El Paso Electric on 9 of the 15 factors compared.

El Paso Electric Company Profile

El Paso Electric Company is a public utility company. As of December 31, 2016, the Company was engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in west Texas and southern New Mexico. As of December 31, 2016, the Company owned or had ownership interests in several electrical generating facilities providing it with a generating capability of approximately 2,080 megawatts (MW). The Company’s energy sources consists of nuclear fuel, natural gas, coal, purchased power and generated by Company-owned solar photovoltaic panels. As of December 31, 2016, the Company had power purchase agreements for 107 MW from solar photovoltaic generation facilities. As of December 31, 2016, the Company served approximately 411,100 residential, commercial, industrial, public authority and wholesale customers. The Company distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico.

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