Fortis (NYSE:FTS) and OGE Energy (NYSE:OGE) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.
Risk and Volatility
Fortis has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, OGE Energy has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.
This is a breakdown of recent ratings for Fortis and OGE Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Fortis presently has a consensus target price of $51.50, indicating a potential upside of 38.11%. OGE Energy has a consensus target price of $37.50, indicating a potential downside of 9.49%. Given Fortis’ stronger consensus rating and higher possible upside, research analysts clearly believe Fortis is more favorable than OGE Energy.
Earnings and Valuation
This table compares Fortis and OGE Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Fortis||$6.44 billion||2.50||$899.56 million||$1.91||19.52|
|OGE Energy||$2.27 billion||3.65||$425.50 million||$2.12||19.54|
Fortis has higher revenue and earnings than OGE Energy. Fortis is trading at a lower price-to-earnings ratio than OGE Energy, indicating that it is currently the more affordable of the two stocks.
This table compares Fortis and OGE Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Fortis pays an annual dividend of $1.36 per share and has a dividend yield of 3.6%. OGE Energy pays an annual dividend of $1.46 per share and has a dividend yield of 3.5%. Fortis pays out 71.2% of its earnings in the form of a dividend. OGE Energy pays out 68.9% 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. Fortis has raised its dividend for 2 consecutive years and OGE Energy has raised its dividend for 12 consecutive years.
Institutional & Insider Ownership
52.4% of Fortis shares are owned by institutional investors. Comparatively, 69.2% of OGE Energy shares are owned by institutional investors. 0.5% of OGE Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
OGE Energy beats Fortis on 11 of the 17 factors compared between the two stocks.
Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean. It generates, transmits, and distributes electricity to approximately 425,000 retail customers in southeastern Arizona; and 97,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,377 MW (MW), including 57 MW of solar capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 64 MW; and distributes natural gas to approximately 1,030,000 customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 564,000 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 hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador serving approximately 268,000 customers with an installed generating capacity of 139 MW; and on Prince Edward Island serving approximately 81,000 customers through generating facilities with a combined capacity of 145 MW. Additionally, it provides integrated electric utility service to approximately 176,000 customers in British Columbia; approximately 268,000 customers in Newfoundland and Labrador; approximately 30,000 customers on Grand Cayman, Cayman Islands; and approximately 15,000 customers on certain islands in Turks and Caicos, as well as holds long-term contracted generation assets in British Columbia and Belize, and the Aitken Creek natural gas storage facility. It also owns and operates transmission and distribution lines; and natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.
About OGE Energy
OGE Energy Corp., together with its subsidiaries, operates as an energy and energy services provider that provides physical delivery and related services for electricity and natural gas primarily in the south central United States. It operates in two segments, Electric Utility and Natural Gas Midstream Operations. The Electric Utility segment generates, transmits, distributes, and sells electric energy. This segment furnishes retail electric service in 267 communities and their contiguous rural and suburban areas; and owns and operates coal-fired, natural gas-fired, wind-powered, and solar-powered generating assets. Its service area covers 30,000 square miles in Oklahoma and western Arkansas, including Oklahoma City in Oklahoma; and Fort Smith, Arkansas. The Natural Gas Midstream Operations segment engages in gathering, processing, transporting, and storing natural gas; and the provision of crude oil gathering services, and interstate and intrastate natural gas pipeline transportation and storage services primarily to its producer, power plant, local distribution company, and industrial end-user customers. As of December 31, 2018, the company owned and operated interconnected electric generation, transmission, and distribution systems, including 11 generating stations with an aggregate capability of 6,616 megawatts; and transmission systems comprising 52 substations and 5,100 structure miles of lines in Oklahoma, and 7 substations and 277 structure miles of lines in Arkansas. Its distribution systems include 345 substations; 29,345 structure miles of overhead lines; 2,940 miles of underground conduit; and 10,932 miles of underground conductors in Oklahoma, as well as 30 substations, 2,786 structure miles of overhead lines, 297 miles of underground conduit, and 685 miles of underground conductors in Arkansas. The company was founded in 1902 and is headquartered in Oklahoma City, Oklahoma.
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