Pacific Gas & Electric (NYSE:PCG) vs. Entergy (NYSE:ETR) Head-To-Head Review

Entergy (NYSE:ETR) and Pacific Gas & Electric (NYSE:PCG) are both large-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, valuation, earnings and risk.

Risk & Volatility

Entergy has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Pacific Gas & Electric has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Dividends

Entergy pays an annual dividend of $2.40 per share and has a dividend yield of 2.5%. Pacific Gas & Electric pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Entergy pays out 59.9% of its earnings in the form of a dividend. Pacific Gas & Electric pays out 9.2% 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. Entergy has increased its dividend for 10 consecutive years and Pacific Gas & Electric has increased its dividend for 1 consecutive years. Entergy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Entergy and Pacific Gas & Electric”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Entergy	$11.88 billion	3.59	$1.06 billion	$4.01	23.79
Pacific Gas & Electric	$24.42 billion	1.74	$2.51 billion	$1.09	14.57

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

Institutional and Insider Ownership

88.1% of Entergy shares are held by institutional investors. Comparatively, 78.6% of Pacific Gas & Electric shares are held by institutional investors. 0.4% of Entergy shares are held by company insiders. Comparatively, 0.1% of Pacific Gas & Electric shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Entergy and Pacific Gas & Electric, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Entergy	0	4	13	0	2.76
Pacific Gas & Electric	0	7	6	0	2.46

Entergy presently has a consensus target price of $91.33, indicating a potential downside of 4.27%. Pacific Gas & Electric has a consensus target price of $20.05, indicating a potential upside of 26.22%. Given Pacific Gas & Electric’s higher probable upside, analysts plainly believe Pacific Gas & Electric is more favorable than Entergy.

Profitability

This table compares Entergy and Pacific Gas & Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Entergy	14.35%	11.52%	2.68%
Pacific Gas & Electric	9.95%	10.13%	2.17%

Summary

Entergy beats Pacific Gas & Electric on 13 of the 17 factors compared between the two stocks.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and retail distribution of electricity in the United States. It generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, including the City of New Orleans; and distributes natural gas. It also engages in the ownership of interests in non-nuclear power plants that sell electric power to wholesale customers, as well as provides decommissioning services to other nuclear power plant owners. It generates electricity through gas, nuclear, coal, hydro, and solar power sources. The company sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company’s power plants have approximately 24,000 megawatts of electric generating capacity. It delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1913 and is headquartered in New Orleans, Louisiana.

About Pacific Gas & Electric

PG&E Corp. operates as a holding company, which engages in generation, transmission, and distribution of electricity and natural gas to customers. It specializes in energy, utility, power, gas, electricity, solar and sustainability. The company was founded in 1995 and is headquartered in Oakland, CA.