Xcel Energy (NASDAQ:XEL – Get Free Report) and FirstEnergy (NYSE:FE – Get Free Report) are both large-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.
Analyst Ratings
This is a summary of recent ratings for Xcel Energy and FirstEnergy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Xcel Energy | 0 | 1 | 13 | 3 | 3.12 |
| FirstEnergy | 0 | 6 | 7 | 0 | 2.54 |
Xcel Energy presently has a consensus price target of $91.65, indicating a potential upside of 28.36%. FirstEnergy has a consensus price target of $52.58, indicating a potential upside of 21.21%. Given Xcel Energy’s stronger consensus rating and higher possible upside, equities analysts clearly believe Xcel Energy is more favorable than FirstEnergy.
Dividends
Risk & Volatility
Xcel Energy has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, FirstEnergy has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.
Valuation & Earnings
This table compares Xcel Energy and FirstEnergy”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Xcel Energy | $14.67 billion | 3.04 | $2.02 billion | $3.65 | 19.56 |
| FirstEnergy | $15.09 billion | 1.66 | $1.02 billion | $1.88 | 23.08 |
Xcel Energy has higher earnings, but lower revenue than FirstEnergy. Xcel Energy is trading at a lower price-to-earnings ratio than FirstEnergy, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Xcel Energy and FirstEnergy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Xcel Energy | 15.28% | 10.65% | 2.97% |
| FirstEnergy | 6.86% | 10.51% | 2.62% |
Institutional & Insider Ownership
78.4% of Xcel Energy shares are held by institutional investors. Comparatively, 89.4% of FirstEnergy shares are held by institutional investors. 0.2% of Xcel Energy shares are held by insiders. Comparatively, 0.1% of FirstEnergy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
Xcel Energy beats FirstEnergy on 13 of the 18 factors compared between the two stocks.
About Xcel Energy
Xcel Energy Inc., through its subsidiaries, engages in the generation, purchasing, transmission, distribution, and sale of electricity. It operates through Regulated Electric Utility, Regulated Natural Gas Utility, and All Other segments. The company generates electricity through wind, nuclear, hydroelectric, biomass, and solar energy sources, as well as coal, natural gas, oil, wood, and refuse-derived fuels. It also purchases, transports, distributes, and sells natural gas to retail customers, as well as transports customer-owned natural gas. In addition, the company develops and leases natural gas pipelines, and storage and compression facilities; and invests in rental housing projects and nonregulated assets, as well as procures equipment for the construction of renewable generation facilities. It serves residential, commercial, and industrial customers in the portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. The company was incorporated in 1909 and is headquartered in Minneapolis, Minnesota.
About FirstEnergy
FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.
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