IDACORP (NYSE: IDA) and El Paso Electric (NYSE:EE) are both mid-cap utilities companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Volatility and Risk

IDACORP has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, El Paso Electric has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for IDACORP and El Paso Electric, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IDACORP 0 2 0 0 2.00
El Paso Electric 0 4 0 0 2.00

IDACORP presently has a consensus price target of $75.00, suggesting a potential downside of 15.18%. El Paso Electric has a consensus price target of $53.00, suggesting a potential downside of 5.61%. Given El Paso Electric’s higher possible upside, analysts plainly believe El Paso Electric is more favorable than IDACORP.

Valuation & Earnings

This table compares IDACORP and El Paso Electric’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IDACORP $1.30 billion 3.43 $438.95 million $3.96 22.33
El Paso Electric $934.44 million 2.44 $360.31 million $2.77 20.27

IDACORP has higher revenue and earnings than El Paso Electric. El Paso Electric is trading at a lower price-to-earnings ratio than IDACORP, indicating that it is currently the more affordable of the two stocks.

Dividends

IDACORP pays an annual dividend of $2.20 per share and has a dividend yield of 2.5%. El Paso Electric pays an annual dividend of $1.34 per share and has a dividend yield of 2.4%. IDACORP pays out 55.6% of its earnings in the form of a dividend. El Paso Electric pays out 48.4% 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. IDACORP has raised its dividend for 5 consecutive years and El Paso Electric has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

76.0% of IDACORP shares are held by institutional investors. Comparatively, 98.0% of El Paso Electric shares are held by institutional investors. 0.7% of IDACORP shares are held by company insiders. Comparatively, 1.3% of El Paso Electric shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
IDACORP 15.31% 9.20% 3.20%
El Paso Electric 11.45% 9.95% 3.14%

Summary

IDACORP beats El Paso Electric on 9 of the 14 factors compared between the two stocks.

IDACORP Company Profile

IDACORP, Inc. is a holding company. The Company’s principal operating subsidiary is Idaho Power Company (Idaho Power). The Company’s segment is utility operations. The utility operations segment’s primary source of revenue is the regulated operations of Idaho Power. Idaho Power is an electric utility engaged in the generation, transmission, distribution, sale and purchase of electric energy and capacity. Idaho Power is the parent of Idaho Energy Resources Co. (IERCo), a joint venturer in Bridger Coal Company, which mines and supplies coal to the Jim Bridger generating plant owned in part by Idaho Power. Its subsidiaries also include IDACORP Financial Services, Inc., an investor in affordable housing and other real estate investments, and Ida-West Energy Company, an operator of small hydroelectric generation projects. As of December 31, 2016, Idaho Power provided electric utility service to approximately 535,000 general business customers in southern Idaho and eastern Oregon.

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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