Head-To-Head Review: OGE Energy (NYSE:OGE) vs. RWE (OTCMKTS:RWEOY)

OGE Energy (NYSE:OGE) and RWE (OTCMKTS:RWEOY) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Profitability

This table compares OGE Energy and RWE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OGE Energy	14.44%	9.48%	3.24%
RWE	15.16%	4.77%	1.83%

Risk & Volatility

OGE Energy has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for OGE Energy and RWE, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OGE Energy	0	7	4	0	2.36
RWE	0	5	2	0	2.29

OGE Energy presently has a consensus target price of $49.80, suggesting a potential upside of 5.80%. RWE has a consensus target price of $53.30, suggesting a potential downside of 18.15%. Given OGE Energy’s stronger consensus rating and higher possible upside, analysts plainly believe OGE Energy is more favorable than RWE.

Dividends

OGE Energy pays an annual dividend of $1.70 per share and has a dividend yield of 3.6%. RWE pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. OGE Energy pays out 74.9% of its earnings in the form of a dividend. RWE pays out 26.4% 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. OGE Energy has raised its dividend for 18 consecutive years. OGE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

71.8% of OGE Energy shares are owned by institutional investors. 0.6% of OGE Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares OGE Energy and RWE”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OGE Energy	$3.26 billion	2.98	$470.70 million	$2.27	20.73
RWE	$19.94 billion	2.37	$3.54 billion	$3.79	17.18

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

Summary

OGE Energy beats RWE on 11 of the 17 factors compared between the two stocks.

About OGE Energy

OGE Energy Corp., together with its subsidiaries, operates as an energy services provider in the United States. The company generates, transmits, distributes, and sells electric energy. In addition, it provides retail electric service to approximately 896,000 customers, which covers a service area of approximately 30,000 square miles in Oklahoma and western Arkansas; and owns and operates coal-fired, natural gas-fired, wind-powered, and solar-powered generating assets. OGE Energy Corp. was founded in 1902 and is headquartered in Oklahoma City, Oklahoma.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.