Head to Head Survey: Fortis (NYSE:FTS) & Xcel Energy (NASDAQ:XEL)

Xcel Energy (NASDAQ:XEL) and Fortis (NYSE:FTS) are both large-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Valuation & Earnings

This table compares Xcel Energy and Fortis”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xcel Energy	$14.67 billion	3.21	$2.02 billion	$3.65	20.68
Fortis	$8.71 billion	3.21	$1.29 billion	$2.47	22.01

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

Analyst Ratings

This is a summary of current recommendations and price targets for Xcel Energy and Fortis, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xcel Energy	0	1	14	2	3.06
Fortis	0	5	3	0	2.38

Xcel Energy presently has a consensus price target of $92.41, suggesting a potential upside of 22.40%. Fortis has a consensus price target of $66.33, suggesting a potential upside of 22.01%. Given Xcel Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Xcel Energy is more favorable than Fortis.

Risk and Volatility

Xcel Energy has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, Fortis has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500.

Profitability

This table compares Xcel Energy and Fortis’ 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%
Fortis	14.17%	7.16%	2.34%

Institutional & Insider Ownership

78.4% of Xcel Energy shares are owned by institutional investors. Comparatively, 57.8% of Fortis shares are owned by institutional investors. 0.2% of Xcel Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Xcel Energy pays an annual dividend of $2.37 per share and has a dividend yield of 3.1%. Fortis pays an annual dividend of $1.82 per share and has a dividend yield of 3.3%. Xcel Energy pays out 64.9% of its earnings in the form of a dividend. Fortis pays out 73.7% 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. Xcel Energy has raised its dividend for 22 consecutive years and Fortis has raised its dividend for 5 consecutive years.

Summary

Xcel Energy beats Fortis on 15 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 Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.