Consolidated Edison (NYSE:ED) versus Edison International (NYSE:EIX) Financial Analysis

Edison International (NYSE:EIX) and Consolidated Edison (NYSE:ED) are both large-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Edison International and Consolidated Edison’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Edison International	17.24%	13.62%	2.63%
Consolidated Edison	11.98%	8.56%	2.78%

Institutional & Insider Ownership

88.9% of Edison International shares are held by institutional investors. Comparatively, 66.3% of Consolidated Edison shares are held by institutional investors. 1.2% of Edison International shares are held by insiders. Comparatively, 0.2% of Consolidated Edison shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Edison International and Consolidated Edison”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Edison International	$18.09 billion	1.20	$1.55 billion	$7.65	7.40
Consolidated Edison	$16.15 billion	2.20	$1.82 billion	$5.51	17.86

Consolidated Edison has lower revenue, but higher earnings than Edison International. Edison International is trading at a lower price-to-earnings ratio than Consolidated Edison, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Edison International and Consolidated Edison, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Edison International	1	8	6	1	2.44
Consolidated Edison	4	5	3	0	1.92

Edison International presently has a consensus price target of $64.30, suggesting a potential upside of 13.62%. Consolidated Edison has a consensus price target of $105.08, suggesting a potential upside of 6.77%. Given Edison International’s stronger consensus rating and higher probable upside, equities analysts clearly believe Edison International is more favorable than Consolidated Edison.

Dividends

Edison International pays an annual dividend of $3.31 per share and has a dividend yield of 5.8%. Consolidated Edison pays an annual dividend of $3.40 per share and has a dividend yield of 3.5%. Edison International pays out 43.3% of its earnings in the form of a dividend. Consolidated Edison pays out 61.7% 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 raised its dividend for 23 consecutive years and Consolidated Edison has raised its dividend for 52 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Edison International has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Consolidated Edison has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Summary

Edison International beats Consolidated Edison on 13 of the 18 factors compared between the two stocks.

About Edison International

Edison International, through its subsidiaries, engages in the generation and distribution of electric power. The company supplies and delivers electricity to approximately 50,000 square mile area of southern California to residential, commercial, industrial, public authorities, agricultural, and other sectors. Its transmission facilities consist of lines ranging from 55 kV to 500 kV and approximately 80 transmission substations; distribution system consists of approximately 38,000 circuit-miles of overhead lines; approximately 31,000 circuit-miles of underground lines; and 730 distribution substations. The company was founded in 1886 and is based in Rosemead, California.

About Consolidated Edison

Consolidated Edison, Inc., through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States. It offers electric services to approximately 3.7 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,530 customers in parts of Manhattan. The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey; and gas to approximately 0.2 million customers in southeastern New York. In addition, it operates 545 circuit miles of transmission lines; 15 transmission substations; 63 distribution substations; 90,051 in-service line transformers; 3,788 pole miles of overhead distribution lines; and 2,314 miles of underground distribution lines, as well as 4,363 miles of mains and 380,870 service lines for natural gas distribution. Further, the company invests in electric and gas transmission projects. It primarily sells electricity to industrial, commercial, residential, and government customers. Consolidated Edison, Inc. was founded in 1823 and is based in New York, New York.