Financial Analysis: Edison International (EIX) vs. Black Hills (BKH)
Edison International (NYSE:EIX) and Black Hills (NYSE:BKH) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Institutional & Insider Ownership
84.7% of Edison International shares are owned by institutional investors. Comparatively, 86.4% of Black Hills shares are owned by institutional investors. 0.4% of Edison International shares are owned by company insiders. Comparatively, 1.0% of Black Hills shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Edison International has a beta of -0.05, suggesting that its share price is 105% less volatile than the S&P 500. Comparatively, Black Hills has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Edison International and Black Hills, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Edison International presently has a consensus price target of $70.75, suggesting a potential upside of 17.84%. Black Hills has a consensus price target of $66.17, suggesting a potential downside of 13.18%. Given Edison International’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Edison International is more favorable than Black Hills.
Earnings and Valuation
This table compares Edison International and Black Hills’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Edison International||$12.66 billion||1.55||-$302.00 million||$4.15||14.47|
|Black Hills||$1.75 billion||2.62||$258.44 million||$3.54||21.53|
Black Hills has lower revenue, but higher earnings than Edison International. Edison International is trading at a lower price-to-earnings ratio than Black Hills, indicating that it is currently the more affordable of the two stocks.
This table compares Edison International and Black Hills’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Edison International pays an annual dividend of $2.45 per share and has a dividend yield of 4.1%. Black Hills pays an annual dividend of $2.02 per share and has a dividend yield of 2.7%. Edison International pays out 59.0% of its earnings in the form of a dividend. Black Hills pays out 57.1% 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. Edison International has increased its dividend for 14 consecutive years and Black Hills has increased its dividend for 49 consecutive years.
Black Hills beats Edison International on 10 of the 17 factors compared between the two stocks.
About Edison International
Edison International, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in the United States. It generates electricity through hydroelectric, diesel/liquid petroleum gas, natural gas, nuclear, and photovoltaic sources. The company supplies electricity primarily to residential, commercial, industrial, agricultural, and other customers, as well as public authorities through transmission and distribution networks. Its transmission facilities consist of lines ranging from 33 kV to 500 kV and substations; and distribution system comprises approximately 53,000 line miles of overhead lines, 38,000 line miles of underground lines, and 800 substations located in California. The company serves approximately 5 million customers. Edison International was founded in 1886 and is based in Rosemead, California.
About Black Hills
Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States. It operates through Electric Utilities, Gas Utilities, Power Generation, and Mining segments. The Electric Utilities segment generates, transmits, and distributes electricity to approximately 212,000 electric customers in Colorado, Montana, South Dakota, and Wyoming, as well as provides electrical system construction services to large industrial customers. This segment owns 939 megawatts of generation capacity and 8,858 miles of electric transmission and distribution lines. The Gas Utilities segment distributes natural gas to approximately 1,054,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming. It also provides appliance repair services to residential customers through company technicians and third-party service providers; and constructs and maintains gas infrastructure facilities for gas transportation customers. This segment owns and operates approximately 4,700 miles of intrastate gas transmission pipelines; 41,158 miles of gas distribution mains and service lines; 7 natural gas storage sites; and approximately 45,000 horsepower of compression and 600 miles of gathering lines. The Power Generation segment produces electric power through wind, natural gas, and coal generating plants; and sells the electric capacity and energy primarily to utilities under long-term contracts. The Mining segment produces coal at its coal mine located near Gillette, Wyoming; and sells the coal to electric generation facilities. Black Hills Corporation was founded in 1941 and is headquartered in Rapid City, South Dakota.
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