Contrasting E.On (OTCMKTS:ENAKF) and Public Service Enterprise Group (NYSE:PEG)

Public Service Enterprise Group (NYSE:PEG) and E.On (OTCMKTS:ENAKF) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Profitability

This table compares Public Service Enterprise Group and E.On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Public Service Enterprise Group	16.04%	12.42%	3.68%
E.On	N/A	N/A	N/A

Valuation & Earnings

This table compares Public Service Enterprise Group and E.On”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Public Service Enterprise Group	$12.54 billion	3.01	$2.11 billion	$4.02	18.83
E.On	N/A	N/A	N/A	($0.25)	-84.77

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

Dividends

Public Service Enterprise Group pays an annual dividend of $2.68 per share and has a dividend yield of 3.5%. E.On pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Public Service Enterprise Group pays out 66.7% of its earnings in the form of a dividend. E.On pays out -238.1% 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. Public Service Enterprise Group has increased its dividend for 14 consecutive years. Public Service Enterprise Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations for Public Service Enterprise Group and E.On, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Public Service Enterprise Group	0	10	6	1	2.47
E.On	0	0	0	0	0.00

Public Service Enterprise Group currently has a consensus target price of $90.63, indicating a potential upside of 19.76%. Given Public Service Enterprise Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Public Service Enterprise Group is more favorable than E.On.

Insider and Institutional Ownership

73.3% of Public Service Enterprise Group shares are held by institutional investors. Comparatively, 25.1% of E.On shares are held by institutional investors. 0.2% of Public Service Enterprise Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Public Service Enterprise Group beats E.On on 14 of the 15 factors compared between the two stocks.

About Public Service Enterprise Group

Public Service Enterprise Group Incorporated, through its subsidiaries, operates in electric and gas utility business in the United States. It operates through PSE&G and PSEG Power segments. The PSE&G segment transmits electricity; distributes electricity and natural gas to residential, commercial, and industrial customers; and appliance services and repairs to customers through its service territory, as well as invests in solar generation projects, and energy efficiency and related programs. The PSEG Power segment engages in nuclear generation businesses; and supplies power and natural gas to nuclear power plants and gas storage facilities activities. As of December 31, 2023, it had electric transmission and distribution system of 25,000 circuit miles and 866,600 poles; 56 switching stations with an installed capacity of 39,953 megavolt-amperes (MVA), and 235 substations with an installed capacity of 10,382 MVA; 109 MVA aggregate installed capacity for substations; four electric distribution headquarters and five electric sub-headquarters; 18,000 miles of gas mains, 12 gas distribution headquarters, two sub-headquarters, and one meter shop, as well as 56 natural gas metering and regulating stations; and 158 MegaWatts defined conditions of installed PV solar capacity. Public Service Enterprise Group Incorporated was founded in 1903 and is based in Newark, New Jersey.

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.