Analyzing SCANA (SCG) and Edison International (EIX)

SCANA (NYSE: SCG) and Edison International (NYSE:EIX) are both mid-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Dividends

SCANA pays an annual dividend of $2.45 per share and has a dividend yield of 6.3%. Edison International pays an annual dividend of $2.17 per share and has a dividend yield of 3.3%. SCANA pays out 77.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Edison International pays out 49.5% of its earnings in the form of a dividend. SCANA has raised its dividend for 12 consecutive years and Edison International has raised its dividend for 17 consecutive years.

Earnings & Valuation

This table compares SCANA and Edison International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SCANA $4.23 billion 1.32 $595.00 million $3.15 12.38
Edison International $11.87 billion 1.79 $1.43 billion $4.38 14.89

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

Insider & Institutional Ownership

66.7% of SCANA shares are owned by institutional investors. Comparatively, 81.1% of Edison International shares are owned by institutional investors. 0.4% of SCANA shares are owned by insiders. Comparatively, 0.4% of Edison International shares are owned by insiders. 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.

Profitability

This table compares SCANA and Edison International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SCANA 10.45% 10.05% 3.05%
Edison International 13.64% 15.35% 3.78%

Analyst Recommendations

This is a summary of current recommendations and price targets for SCANA and Edison International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SCANA 2 6 2 0 2.00
Edison International 0 8 5 0 2.38

SCANA presently has a consensus target price of $59.21, suggesting a potential upside of 51.79%. Edison International has a consensus target price of $81.92, suggesting a potential upside of 25.58%. Given SCANA’s higher probable upside, research analysts clearly believe SCANA is more favorable than Edison International.

Volatility and Risk

SCANA has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Edison International has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.

Summary

Edison International beats SCANA on 15 of the 17 factors compared between the two stocks.

About SCANA

SCANA Corporation is a holding company. The Company, through its subsidiaries, is engaged in the generation, transmission, distribution and sale of electricity in South Carolina. The Company operates through segments, including Electric Operations, Gas Distribution, Gas Marketing and All Other. The Company is engaged in the purchase, transmission and sale of natural gas in North Carolina and South Carolina. The Electric Operations segment generates, transmits and distributes electricity. The Company’s regulated businesses include subsidiaries, such as South Carolina Electric & Gas Company (SCE&G), South Carolina Fuel Company, Inc. (Fuel Company), South Carolina Generating Company, Inc. (GENCO) and Public Service Company of North Carolina, Incorporated (PSNC Energy). The Company’s nonregulated businesses include subsidiaries, such as SCANA Energy Marketing, Inc. (SCANA Energy), ServiceCare, Inc., SCANA Services, Inc. and SCANA Corporate Security Services, Inc.

About Edison International

Edison International is the holding company of Southern California Edison Company (SCE). As of December 31, 2016, SCE, a public utility, was primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. The Company is also the parent company of Edison Energy Group, Inc. (Edison Energy Group), a holding company for subsidiaries engaged in pursuing competitive business opportunities across energy services and distributed solar to commercial and industrial customers. SCE’s projects include West of Devers, Mesa Substation, Alberhill System, Riverside Transmission Reliability, Eldorado-Lugo-Mohave Upgrade, Tehachapi and Coolwater-Lugo. As of December 31, 2016, the West of Devers Project consisted of upgrading and reconfiguring approximately 48 miles of existing 220 kilovolt (kV) transmission lines between the Devers, El Casco, Vista and San Bernardino substations.

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