Critical Survey: E.On (OTCMKTS:EONGY) & Iren (OTCMKTS:IRDEY)

Iren (OTCMKTS:IRDEY) and E.On (OTCMKTS:EONGY) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for Iren and E.On, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iren	0	0	0	0	0.00
E.On	0	6	2	0	2.25

Profitability

This table compares Iren and E.On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iren	N/A	N/A	N/A
E.On	4.49%	11.54%	2.72%

Dividends

Iren pays an annual dividend of $0.38 per share and has a dividend yield of 1.3%. E.On pays an annual dividend of $0.49 per share and has a dividend yield of 2.4%. Iren pays out 62.8% of its earnings in the form of a dividend. E.On pays out 32.7% 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. E.On is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Iren and E.On”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iren	N/A	N/A	N/A	$0.61	47.49
E.On	$89.03 billion	0.59	$1.96 billion	$1.50	13.49

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

Summary

E.On beats Iren on 9 of the 10 factors compared between the two stocks.

About Iren

Iren SpA, together with its subsidiaries, operates as a multi-utility company in Italy. It operates through Networks, Waste Management, Energy, Market, and Other Services segments. The company produces and distributes electricity primarily from hydroelectric, thermoelectric, cogeneration, and other renewables, as well as distributes natural gas. It distributes electrical energy through 7,872 kilometers of medium and low voltage networks to approximately 729,000 connected users; and natural gas through its network of approximately 8,160 kilometers of high, medium, and low-pressure pipes to approximately 738,000 customers. The company also operates integrated water cycle, which includes 20,358 kilometers of pipeline networks that serve 2.9 million residents; 11,279 kilometers of sewerage networks; and operates treatment plants. In addition, it is involved in the provision of services related to street lighting systems, traffic light systems, heating systems, and electrical and special systems; collection and disposal of waste; snow clearing services; and analysis laboratories, telecommunications, and other services. It operates 35 hydroelectric plants, 7 thermoelectric cogeneration systems, and 1 thermoelectric plant, as well as 105 photovoltaic production plants with an installed capacity of 142 MW. Iren SpA is based in Reggio Emilia, Italy.

About E.On

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, rest of Europe, and internationally. It operates through two segments, Energy Networks and Customer Solutions. The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services. The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities. Additionally, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties. The company was founded in 1923 and is headquartered in Essen, Germany.