Westar Energy (NYSE: WR) and UNITIL Corporation (NYSE:UTL) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their profitabiliy, valuation, earnings, analyst recommendations, dividends, institutional ownership and risk.
This table compares Westar Energy and UNITIL Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings for Westar Energy and UNITIL Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
UNITIL Corporation has a consensus price target of $44.00, suggesting a potential downside of 11.65%. Given UNITIL Corporation’s higher possible upside, analysts clearly believe UNITIL Corporation is more favorable than Westar Energy.
Volatility and Risk
Westar Energy has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, UNITIL Corporation has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.
Valuation & Earnings
This table compares Westar Energy and UNITIL Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Westar Energy||$2.57 billion||2.96||$1.05 billion||$2.39||22.41|
|UNITIL Corporation||$383.60 million||1.83||$115.30 million||$2.04||24.41|
Westar Energy has higher revenue and earnings than UNITIL Corporation. Westar Energy is trading at a lower price-to-earnings ratio than UNITIL Corporation, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
75.0% of Westar Energy shares are owned by institutional investors. Comparatively, 60.1% of UNITIL Corporation shares are owned by institutional investors. 0.6% of Westar Energy shares are owned by insiders. Comparatively, 2.5% of UNITIL Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Westar Energy pays an annual dividend of $1.60 per share and has a dividend yield of 3.0%. UNITIL Corporation pays an annual dividend of $1.44 per share and has a dividend yield of 2.9%. Westar Energy pays out 66.9% of its earnings in the form of a dividend. UNITIL Corporation pays out 70.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Westar Energy has increased its dividend for 11 consecutive years and UNITIL Corporation has increased its dividend for 2 consecutive years. Westar Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Westar Energy beats UNITIL Corporation on 11 of the 15 factors compared between the two stocks.
Westar Energy Company Profile
Westar Energy, Inc. is an electric utility. The Company provides electric generation, transmission and distribution services. The Company provides these services in central and northeastern Kansas, including the cities of Topeka, Lawrence, Manhattan, Salina and Hutchinson. Its subsidiary, Kansas Gas and Electric Company (KGE), provides these services in south-central and southeastern Kansas, including the city of Wichita. Both the Company and KGE conduct business using the name Westar Energy. The Company supplies electric energy at retail to customers in Kansas. The Company also supplies electric energy at wholesale to municipalities and electric cooperatives in Kansas, and has contracts for the sale or purchase of wholesale electricity with other utilities. As of December 31, 2016, it had 6,292 megawatts (MW) of generating capacity in service.
UNITIL Corporation Company Profile
Unitil Corporation is a public utility holding company. The Company’s principal business is the local distribution of electricity in the southeastern seacoast and state capital regions of New Hampshire and the greater Fitchburg area of north central Massachusetts and the local distribution of natural gas in southeastern New Hampshire, portions of southern Maine to the Lewiston-Auburn area and in the greater Fitchburg area of north central Massachusetts. Its segments include utility gas operations, utility electric operations and non-regulated. Its operations include natural gas operations; natural gas distribution utility operations; gas transmission pipeline operations; electric distribution utility operations, and non-regulated and other non-utility operations. As of December 31, 2016, it was engaged in the distribution of electricity and natural gas to approximately 184,200 customers throughout its service territories in the states of New Hampshire, Massachusetts and Maine.
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