Critical Contrast: Black Hills (NYSE:BKH) versus Electricité de France (OTCMKTS:ECIFF)

Black Hills (NYSE:BKH) and Electricité de France (OTCMKTS:ECIFF) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Dividends

Black Hills pays an annual dividend of $2.81 per share and has a dividend yield of 3.8%. Electricité de France pays an annual dividend of $0.68 per share and has a dividend yield of 5.3%. Black Hills pays out 71.0% of its earnings in the form of a dividend. Electricité de France pays out 35.8% 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. Black Hills has increased its dividend for 55 consecutive years. Electricité de France is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Black Hills and Electricité de France”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Black Hills	$2.30 billion	2.43	$291.60 million	$3.96	18.53
Electricité de France	N/A	N/A	N/A	$1.90	6.77

Black Hills has higher revenue and earnings than Electricité de France. Electricité de France is trading at a lower price-to-earnings ratio than Black Hills, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Black Hills and Electricité de France’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Black Hills	13.01%	7.98%	2.93%
Electricité de France	N/A	N/A	N/A

Analyst Ratings

This is a summary of current ratings and recommmendations for Black Hills and Electricité de France, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Black Hills	0	0	6	0	3.00
Electricité de France	0	0	0	0	0.00

Black Hills presently has a consensus target price of $81.67, suggesting a potential upside of 11.29%. Given Black Hills’ stronger consensus rating and higher probable upside, research analysts plainly believe Black Hills is more favorable than Electricité de France.

Insider & Institutional Ownership

86.7% of Black Hills shares are held by institutional investors. Comparatively, 3.7% of Electricité de France shares are held by institutional investors. 0.6% of Black Hills 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

Black Hills beats Electricité de France on 12 of the 14 factors compared between the two stocks.

About Black Hills

Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States. The company operates in two segments: Electric Utilities and Gas Utilities. The Electric Utilities segment generates, transmits, and distributes electricity to approximately 222,000 electric utility customers in Colorado, Montana, South Dakota, and Wyoming; and owns and operates 1,394 megawatts of generation capacity and 9,106 miles of electric transmission and distribution lines. The Gas Utilities segment distributes natural gas to approximately 1,116,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming; owns and operates 4,663 miles of intrastate gas transmission pipelines; 42,514 miles of gas distribution mains and service lines; seven natural gas storage sites; and approximately 50,000 horsepower of compression and 516 miles of gathering lines. It also constructs and maintains customer owned gas infrastructure facilities for gas transportation customers; and provides appliance repair services to residential utility customers, as well as electrical system construction services to large industrial customers. In addition, the company produces electric power through wind, natural gas, and coal-fired generating plants; and coal at its coal mine located near Gillette, Wyoming. Black Hills Corporation was incorporated in 1941 and is headquartered in Rapid City, South Dakota.

About Electricité de France

Electricité de France S.A., an integrated energy company, engages in the power generation, transmission, distribution, supply, and trading activities in France, the United Kingdom, Italy, and internationally. The company generates electricity through nuclear, fossil fuel, hydro, solar, wind, biomass, biogas, thermal, and cogeneration plants. It also manages low and medium-voltage public electricity distribution networks; operates, maintains, and develops high-voltage and very-high-voltage electricity transmission networks; and services and produces equipment and fuel for nuclear reactors. In addition, the company is involved in commodity trading activities; and the provision of energy services, including district heating services, thermal energy services, etc. It serves approximately 38.5 million customers, including small businesses, local authorities, and industrial and residential customers. The company was founded in 1946 and is headquartered in Paris, France.