Unitil (NYSE:UTL) and OGE Energy (NYSE:OGE) Critical Comparison

Unitil (NYSE:UTL) and OGE Energy (NYSE:OGE) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.

Earnings & Valuation

This table compares Unitil and OGE Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Unitil	$494.80 million	1.84	$47.10 million	$2.89	17.57
OGE Energy	$2.99 billion	2.92	$441.50 million	$2.49	17.40

OGE Energy has higher revenue and earnings than Unitil. OGE Energy is trading at a lower price-to-earnings ratio than Unitil, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Unitil and OGE Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Unitil	9.32%	9.04%	2.62%
OGE Energy	15.28%	10.77%	3.59%

Dividends

Unitil pays an annual dividend of $1.80 per share and has a dividend yield of 3.5%. OGE Energy pays an annual dividend of $1.70 per share and has a dividend yield of 3.9%. Unitil pays out 62.3% of its earnings in the form of a dividend. OGE Energy pays out 68.3% 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. Unitil has raised its dividend for 12 consecutive years and OGE Energy has raised its dividend for 18 consecutive years. OGE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Unitil and OGE Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Unitil	0	2	0	0	2.00
OGE Energy	1	5	4	0	2.30

Unitil presently has a consensus target price of $55.00, suggesting a potential upside of 8.33%. OGE Energy has a consensus target price of $47.13, suggesting a potential upside of 8.80%. Given OGE Energy’s stronger consensus rating and higher possible upside, analysts clearly believe OGE Energy is more favorable than Unitil.

Risk & Volatility

Unitil has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, OGE Energy has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Insider and Institutional Ownership

76.8% of Unitil shares are held by institutional investors. Comparatively, 71.8% of OGE Energy shares are held by institutional investors. 2.0% of Unitil shares are held by insiders. Comparatively, 0.5% of OGE Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

OGE Energy beats Unitil on 12 of the 17 factors compared between the two stocks.

About Unitil

Unitil Corporation, a public utility holding company, engages in the distribution of electricity and natural gas. It operates through two segments, Utility Electric Operations, Utility Gas Operations. The company distributes electricity in the southeastern seacoast and state capital regions of New Hampshire, and the greater Fitchburg area of north central Massachusetts; and distributes natural gas in southeastern New Hampshire and portions of southern and central Maine, including the city of Portland and the Lewiston-Auburn area, as well as electricity and natural gas in the greater Fitchburg area of north central Massachusetts. It also operates 86 miles of interstate underground natural gas transmission pipeline that provides interstate natural gas pipeline access and transportation services primarily in Maine and New Hampshire. In addition, the company provides real estate management services. It serves approximately 108,100 electric customers and 87,500 natural gas customers. Unitil Corporation was incorporated in 1984 and is headquartered in Hampton, New Hampshire.

About OGE Energy

OGE Energy Corp., together with its subsidiaries, operates as an energy services provider in the United States. The company generates, transmits, distributes, and sells electric energy. In addition, it provides retail electric service to approximately 896,000 customers, which covers a service area of approximately 30,000 square miles in Oklahoma and western Arkansas; and owns and operates coal-fired, natural gas-fired, wind-powered, and solar-powered generating assets. OGE Energy Corp. was founded in 1902 and is headquartered in Oklahoma City, Oklahoma.