CenterPoint Energy (NYSE: CNP) and National Grid Transco, PLC (NYSE:NGG) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Dividends

CenterPoint Energy pays an annual dividend of $1.07 per share and has a dividend yield of 3.6%. National Grid Transco, PLC pays an annual dividend of $2.89 per share and has a dividend yield of 4.6%. CenterPoint Energy pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CenterPoint Energy has increased its dividend for 11 consecutive years.

Earnings and Valuation

This table compares CenterPoint Energy and National Grid Transco, PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CenterPoint Energy $8.85 billion 1.44 $2.08 billion $1.39 21.28
National Grid Transco, PLC $19.84 billion 2.15 $6.71 billion N/A N/A

National Grid Transco, PLC has higher revenue and earnings than CenterPoint Energy.

Volatility & Risk

CenterPoint Energy has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, National Grid Transco, PLC has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for CenterPoint Energy and National Grid Transco, PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CenterPoint Energy 0 6 1 0 2.14
National Grid Transco, PLC 2 4 7 0 2.38

CenterPoint Energy presently has a consensus target price of $28.57, suggesting a potential downside of 3.41%. National Grid Transco, PLC has a consensus target price of $69.00, suggesting a potential upside of 10.17%. Given National Grid Transco, PLC’s stronger consensus rating and higher probable upside, analysts plainly believe National Grid Transco, PLC is more favorable than CenterPoint Energy.

Profitability

This table compares CenterPoint Energy and National Grid Transco, PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CenterPoint Energy 6.86% 16.45% 2.65%
National Grid Transco, PLC N/A N/A N/A

Institutional & Insider Ownership

76.8% of CenterPoint Energy shares are held by institutional investors. Comparatively, 5.1% of National Grid Transco, PLC shares are held by institutional investors. 0.2% of CenterPoint Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

National Grid Transco, PLC beats CenterPoint Energy on 8 of the 15 factors compared between the two stocks.

About CenterPoint Energy

CenterPoint Energy, Inc. is a public utility holding company. The Company, through its subsidiaries, owns and operates electric transmission and distribution facilities, and natural gas distribution facilities. The Electric Transmission & Distribution segment provides electric transmission and distribution services to retail electric providers. Its Natural Gas Distribution segment offers intrastate natural gas sales to and natural gas transportation and distribution for residential, commercial and industrial customers. Its Energy Services segment includes non-rate regulated gas sales and transportation and storage services for commercial and industrial customers. Its Midstream Investments segment includes equity investment in Enable that owns, operates and develops natural gas and crude oil assets. Its Other Operations segment includes office buildings and other real estate used in its business operations and other corporate operations.

About National Grid Transco, PLC

National Grid plc is an electricity and gas utility company focused on transmission and distribution activities in electricity and gas in both the United Kingdom and the United States. The Company’s segments include UK Electricity Transmission, which is engaged in high voltage electricity transmission networks in Great Britain; UK Gas Transmission, which is the gas transmission network in Great Britain and United Kingdom liquefied natural gas (LNG) storage activities; UK Gas Distribution, which includes approximately four of the eight regional networks of Great Britain’s gas distribution system, and US Regulated, which includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York, and New England and electricity generation facilities in New York. Its other activities relate to non-regulated businesses and other commercial operations not included within the above segments.

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