Financial Comparison: DTE Energy (NYSE:DTE) vs. PPL (NYSE:PPL)

DTE Energy (NYSE:DTE) and PPL (NYSE:PPL) are both large-cap utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Profitability

This table compares DTE Energy and PPL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DTE Energy	9.24%	12.72%	2.97%
PPL	13.06%	9.29%	3.10%

Analyst Ratings

This is a summary of current ratings for DTE Energy and PPL, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DTE Energy	0	4	9	1	2.79
PPL	0	3	9	1	2.85

DTE Energy currently has a consensus price target of $152.17, suggesting a potential upside of 2.80%. PPL has a consensus price target of $41.17, suggesting a potential upside of 6.46%. Given PPL’s stronger consensus rating and higher possible upside, analysts clearly believe PPL is more favorable than DTE Energy.

Insider and Institutional Ownership

76.1% of DTE Energy shares are owned by institutional investors. Comparatively, 77.0% of PPL shares are owned by institutional investors. 0.6% of DTE Energy shares are owned by insiders. Comparatively, 0.3% of PPL shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares DTE Energy and PPL”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DTE Energy	$15.81 billion	1.95	$1.46 billion	$7.02	21.09
PPL	$9.04 billion	3.21	$1.18 billion	$1.60	24.17

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

Dividends

DTE Energy pays an annual dividend of $4.66 per share and has a dividend yield of 3.1%. PPL pays an annual dividend of $1.14 per share and has a dividend yield of 2.9%. DTE Energy pays out 66.4% of its earnings in the form of a dividend. PPL pays out 71.3% 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. DTE Energy has increased its dividend for 16 consecutive years and PPL has increased its dividend for 3 consecutive years. DTE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

DTE Energy has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, PPL has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

About DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to various residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through coal-fired plants, hydroelectric pumped storage, and nuclear plants, as well as wind and solar assets. This segment owns and operates distribution substations and line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to various residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. Its DTE Vantage segment offers metallurgical and petroleum coke to steel and other industries; and power generation, steam production, chilled water production, and wastewater treatment services, as well as air supplies compressed air to industrial customers. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1849 and is based in Detroit, Michigan.

About PPL

PPL Corporation, an energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States. It operates through three segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.