OGE Energy (NYSE:OGE) versus DTE Energy (NYSE:DTE) Critical Survey

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for OGE Energy and DTE Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OGE Energy 0 3 3 0 2.50
DTE Energy 0 4 8 0 2.67

OGE Energy presently has a consensus target price of $33.00, indicating a potential upside of 8.55%. DTE Energy has a consensus target price of $126.33, indicating a potential upside of 18.56%. Given DTE Energy’s stronger consensus rating and higher probable upside, analysts clearly believe DTE Energy is more favorable than OGE Energy.

Valuation and Earnings

This table compares OGE Energy and DTE Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OGE Energy $2.23 billion 2.73 $433.60 million $2.16 14.07
DTE Energy $12.67 billion 1.62 $1.17 billion $6.30 16.91

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

Volatility and Risk

OGE Energy has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, DTE Energy has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Insider and Institutional Ownership

64.0% of OGE Energy shares are held by institutional investors. Comparatively, 72.8% of DTE Energy shares are held by institutional investors. 0.5% of OGE Energy shares are held by insiders. Comparatively, 0.6% of DTE Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
OGE Energy -4.85% 10.86% 3.98%
DTE Energy 9.10% 9.82% 2.77%

Dividends

OGE Energy pays an annual dividend of $1.55 per share and has a dividend yield of 5.1%. DTE Energy pays an annual dividend of $4.05 per share and has a dividend yield of 3.8%. OGE Energy pays out 71.8% of its earnings in the form of a dividend. DTE Energy pays out 64.3% 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 13 consecutive years and DTE Energy has raised its dividend for 8 consecutive years. OGE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

DTE Energy beats OGE Energy 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 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.

About DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to approximately 2.2 million residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through fossil-fuel, hydroelectric pumped storage, and nuclear plants, as well as wind and other renewable assets. This segment owns and operates approximately 696 distribution substations and 442,700 line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to approximately 1.3 million residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. This segment has approximately 19,800 miles of distribution mains; 1,305,000 service pipelines; and 1,273,000 active meters, as well as owns approximately 2,000 miles of transmission pipelines. Its Gas Storage and Pipelines segment owns natural gas storage fields, lateral and gathering pipeline systems, and compression and surface facilities, as well as has ownership interests in interstate pipelines serving the Midwest, Ontario, and northeast markets. The company's Power and Industrial Projects segment offers metallurgical coke; pulverized coal and petroleum coke to the steel, pulp and paper, and other industries; and power, steam and chilled water production, and wastewater treatment services, as well as supplies compressed air to industrial customers. It also owns and operates 5 renewable generating plants with a capacity of 217 MWs; 23 landfill gas recovery sites; and 10 reduced emissions fuel facilities. Its Energy Trading segment engages in power and gas marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1903 and is headquartered in Detroit, Michigan.

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