Critical Analysis: Pacific Gas & Electric (NYSE:PCG) vs. Comp En De Mn Cemig ADS (NYSE:CIG)

Pacific Gas & Electric (NYSE:PCG) and Comp En De Mn Cemig ADS (NYSE:CIG) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Pacific Gas & Electric and Comp En De Mn Cemig ADS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pacific Gas & Electric	1	4	7	0	2.50
Comp En De Mn Cemig ADS	0	0	1	0	3.00

Pacific Gas & Electric currently has a consensus target price of $22.10, suggesting a potential upside of 28.69%. Given Pacific Gas & Electric’s higher probable upside, equities research analysts plainly believe Pacific Gas & Electric is more favorable than Comp En De Mn Cemig ADS.

Volatility & Risk

Pacific Gas & Electric has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500. Comparatively, Comp En De Mn Cemig ADS has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Institutional & Insider Ownership

78.6% of Pacific Gas & Electric shares are held by institutional investors. 0.2% of Pacific Gas & Electric shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Pacific Gas & Electric and Comp En De Mn Cemig ADS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pacific Gas & Electric	11.44%	11.95%	2.65%
Comp En De Mn Cemig ADS	11.12%	17.63%	7.75%

Earnings & Valuation

This table compares Pacific Gas & Electric and Comp En De Mn Cemig ADS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pacific Gas & Electric	$24.94 billion	1.85	$2.70 billion	$1.29	13.31
Comp En De Mn Cemig ADS	$42.75 billion	0.14	$877.05 million	$0.19	11.08

Pacific Gas & Electric has higher earnings, but lower revenue than Comp En De Mn Cemig ADS. Comp En De Mn Cemig ADS is trading at a lower price-to-earnings ratio than Pacific Gas & Electric, indicating that it is currently the more affordable of the two stocks.

Dividends

Pacific Gas & Electric pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Comp En De Mn Cemig ADS pays an annual dividend of $0.18 per share and has a dividend yield of 8.6%. Pacific Gas & Electric pays out 15.5% of its earnings in the form of a dividend. Comp En De Mn Cemig ADS pays out 94.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pacific Gas & Electric has increased its dividend for 1 consecutive years.

Summary

Pacific Gas & Electric beats Comp En De Mn Cemig ADS on 11 of the 17 factors compared between the two stocks.

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.

About Comp En De Mn Cemig ADS

Companhia Energética de Minas Gerais, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in Brazil. The company generates electricity through renewable energy sources, such as water, wind, sun, and biomass; or non-renewable sources, including fossil and nuclear fuels. As of December 31, 2016, it operated hydroelectric plants, thermoelectric plants, and solar plants with a total installed capacity of approximately 8,000 megawatts in 10 states of Brazil. It is also involved in the telecommunications and energy solutions consulting businesses; exploitation of natural gas; sale and trading of electricity; and acquisition, transport, and distribution of gas and its subproducts and derivatives, as well as provision of technology systems and systems for operational management of public service concessions, including companies operating in electricity, gas, water and sewerage, and other utility companies. The company was founded in 1952 and is headquartered in Belo Horizonte, Brazil.