UNS Energy (NYSE: UNS) and Xcel Energy (NYSE:XEL) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

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This table compares UNS Energy and Xcel Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UNS Energy N/A N/A N/A
Xcel Energy 10.06% 10.44% 2.80%

Insider & Institutional Ownership

74.0% of Xcel Energy shares are owned by institutional investors. 0.2% of Xcel Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Xcel Energy pays an annual dividend of $1.52 per share and has a dividend yield of 3.4%. UNS Energy does not pay a dividend. Xcel Energy pays out 66.1% of its earnings in the form of a dividend. Xcel Energy has increased its dividend for 14 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for UNS Energy and Xcel Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UNS Energy 0 0 1 0 3.00
Xcel Energy 0 7 4 0 2.36

UNS Energy presently has a consensus target price of $33.00, suggesting a potential upside of Infinity. Xcel Energy has a consensus target price of $48.09, suggesting a potential upside of 8.17%. Given UNS Energy’s stronger consensus rating and higher possible upside, equities research analysts clearly believe UNS Energy is more favorable than Xcel Energy.

Valuation and Earnings

This table compares UNS Energy and Xcel Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UNS Energy N/A N/A N/A N/A N/A
Xcel Energy $11.40 billion 1.98 $1.15 billion $2.30 19.33

Xcel Energy has higher revenue and earnings than UNS Energy.

Summary

Xcel Energy beats UNS Energy on 9 of the 12 factors compared between the two stocks.

UNS Energy Company Profile

UNS Energy Corporation, formerly UniSource Energy Corporation, is a holding company. The Company owns the outstanding common stock of Tucson Electric Power Company (TEP), UniSource Energy Services, Inc. (UES), UniSource Energy Development Company (UED), and Millennium Energy Holdings, Inc. (Millennium). It operates in three segments: TEP, UNS Gas, Inc. (UNS Gas) and UNS Electric, Inc. (UNS Electric). TEP is an electric utility serving the community of Tucson, Arizona. UNS Gas is a gas distribution company serving approximately 148,000 retail customers in Mohave, Yavapai, Coconino, and Navajo counties in northern Arizona, as well as Santa Cruz County in southeastern Arizona. UNS Electric is a vertically integrated electric utility company serving approximately 91,000 retail customers in Mohave and Santa Cruz counties. In July 2011, UNS Electric purchased the Black Mountain Generating Station (BMGS) from UED.

Xcel Energy Company Profile

Xcel Energy Inc. is a public utility holding company. The Company’s operations include the activity of four utility subsidiaries that serve electric and natural gas customers in eight states. The Company’s segments include regulated electric utility, regulated natural gas utility and all other. The Company’s utility subsidiaries include NSP-Minnesota, NSP-Wisconsin, Public Service Company of Colorado (PSCo) and Southwestern Public Service Co. (SPS), which serve customers in portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Along with WYCO Development LLC (WYCO), a joint venture formed with Colorado Interstate Gas Company, LLC (CIG) to develop and lease natural gas pipelines storage and compression facilities, and WestGas InterState, Inc. (WGI), an interstate natural gas pipeline company, these companies comprise the regulated utility operations.

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