Contrasting E.On (OTCMKTS:EONGY) and Eversource Energy (NYSE:ES)

E.On (OTCMKTS:EONGY) and Eversource Energy (NYSE:ES) are both large-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for E.On and Eversource Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
E.On	0	5	2	1	2.50
Eversource Energy	3	5	4	0	2.08

Eversource Energy has a consensus target price of $69.11, suggesting a potential downside of 6.40%. Given Eversource Energy’s higher possible upside, analysts plainly believe Eversource Energy is more favorable than E.On.

Volatility and Risk

E.On has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Eversource Energy has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Dividends

E.On pays an annual dividend of $0.46 per share and has a dividend yield of 2.5%. Eversource Energy pays an annual dividend of $3.01 per share and has a dividend yield of 4.1%. E.On pays out 35.9% of its earnings in the form of a dividend. Eversource Energy pays out 129.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eversource Energy has increased its dividend for 2 consecutive years. Eversource Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

80.0% of Eversource Energy shares are held by institutional investors. 0.4% of Eversource Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares E.On and Eversource Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
E.On	$86.71 billion	0.56	$4.90 billion	$1.28	14.52
Eversource Energy	$11.90 billion	2.30	$811.65 million	$2.33	31.69

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
E.On	3.81%	12.59%	2.72%
Eversource Energy	6.60%	11.00%	2.81%

Summary

Eversource Energy beats E.On on 11 of the 18 factors compared between the two stocks.

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.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.