Great Plains Energy (NYSE:GXP) and CenterPoint Energy (NYSE:CNP) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.
Great Plains Energy pays an annual dividend of $0.82 per share. CenterPoint Energy pays an annual dividend of $1.11 per share and has a dividend yield of 4.0%. Great Plains Energy pays out 47.1% of its earnings in the form of a dividend. CenterPoint Energy pays out 81.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Great Plains Energy has increased its dividend for 7 consecutive years and CenterPoint Energy has increased its dividend for 12 consecutive years. CenterPoint Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current recommendations for Great Plains Energy and CenterPoint Energy, as provided by MarketBeat.
Great Plains Energy presently has a consensus price target of $30.50, suggesting a potential upside of ∞. CenterPoint Energy has a consensus price target of $29.13, suggesting a potential upside of 5.95%. Given Great Plains Energy’s stronger consensus rating and higher possible upside, research analysts plainly believe Great Plains Energy is more favorable than CenterPoint Energy.
Institutional and Insider Ownership
0.0% of Great Plains Energy shares are owned by institutional investors. Comparatively, 67.5% of CenterPoint Energy shares are owned by institutional investors. 0.4% of Great Plains Energy shares are owned by company insiders. Comparatively, 0.2% of CenterPoint Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Great Plains Energy and CenterPoint Energy’s gross revenue, earnings per share (EPS) and valuation.
CenterPoint Energy has higher revenue and earnings than Great Plains Energy. Great Plains Energy is trading at a lower price-to-earnings ratio than CenterPoint Energy, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Great Plains Energy has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500. Comparatively, CenterPoint Energy has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.
This table compares Great Plains Energy and CenterPoint Energy’s net margins, return on equity and return on assets.
CenterPoint Energy beats Great Plains Energy on 11 of the 16 factors compared between the two stocks.
Great Plains Energy Company Profile
Great Plains Energy Incorporated, through its subsidiaries, generates, transmits, distributes, and sells electricity. It also provides regulated steam services in St. Joseph, Missouri. The company generates electricity using coal, nuclear, natural gas, oil, wind, solar, landfill gas, and hydroelectric resources. It has approximately 6,500 megawatts of generating capacity. The company sells electricity to approximately 867,100 customers in western Missouri and eastern Kansas, including approximately 764,200 residences and 100,400 commercial firms, as well as 2,500 industrials, municipalities, and other electric utilities. Great Plains Energy Incorporated was founded in 1919 and is headquartered in Kansas City, Missouri.
CenterPoint Energy Company Profile
CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company's Electric Transmission & Distribution segment offers electric transmission and distribution services to retail electric providers, municipalities, electric cooperatives, and other distribution companies. As of December 31, 2017, this segment owned 28,883 pole miles of overhead distribution lines and 24,662 circuit miles of underground distribution lines; and 235 substations with a transformer capacity of 64,924 megavolt amperes, as well as operated 14 regional service centers. Its Natural Gas Distribution segment sells regulated intrastate natural gas; provides natural gas transportation and storage services for residential, commercial, industrial, and transportation customers; and offers unregulated services comprising residential appliance repair and maintenance services. As of December 31, 2017, this segment owned approximately 75,000 linear miles of natural gas distribution mains. The company's Energy Services segment provides physical natural gas supplies primarily to commercial and industrial customers, and electric and natural gas utilities; natural gas management services; and physical delivery services, as well as procures and optimizes transportation and storage assets. This segment owns and operates approximately 200 miles of intrastate pipelines; and leases transportation capacity on various interstate and intrastate pipelines, and storage. Its Midstream Investments segment offers natural gas and crude oil gathering, and natural gas processing services to its producer customers; and interstate and intrastate natural gas pipeline transportation and storage services to its producer, power plant, local distribution company, and industrial end-user customers. The company was founded in 1882 and is based in Houston, Texas.