Head to Head Contrast: NextEra Energy (NYSE:NEE) versus Exelon (NASDAQ:EXC)

NextEra Energy (NYSE:NEE) and Exelon (NASDAQ:EXC) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Dividends

NextEra Energy pays an annual dividend of $2.26 per share and has a dividend yield of 2.8%. Exelon pays an annual dividend of $1.60 per share and has a dividend yield of 3.5%. NextEra Energy pays out 72.0% of its earnings in the form of a dividend. Exelon pays out 60.8% 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. NextEra Energy has increased its dividend for 31 consecutive years and Exelon has increased its dividend for 3 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for NextEra Energy and Exelon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NextEra Energy	0	5	12	3	2.90
Exelon	1	5	6	1	2.54

NextEra Energy presently has a consensus target price of $90.22, indicating a potential upside of 10.17%. Exelon has a consensus target price of $50.55, indicating a potential upside of 9.41%. Given NextEra Energy’s stronger consensus rating and higher possible upside, analysts plainly believe NextEra Energy is more favorable than Exelon.

Valuation & Earnings

This table compares NextEra Energy and Exelon”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NextEra Energy	$26.30 billion	6.49	$6.95 billion	$3.14	26.08
Exelon	$23.77 billion	1.96	$2.46 billion	$2.63	17.57

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

Institutional and Insider Ownership

78.7% of NextEra Energy shares are owned by institutional investors. Comparatively, 80.9% of Exelon shares are owned by institutional investors. 0.2% of NextEra Energy shares are owned by company insiders. Comparatively, 0.1% of Exelon shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares NextEra Energy and Exelon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NextEra Energy	24.72%	12.42%	3.88%
Exelon	11.16%	9.85%	2.47%

Volatility & Risk

NextEra Energy has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Exelon has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

Summary

NextEra Energy beats Exelon on 15 of the 18 factors compared between the two stocks.

About NextEra Energy

NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear,natural gas, and other clean energy. It also develops, constructs, and operates long-term contracted assets that consists of clean energy solutions, such as renewable generation facilities, battery storage projects, and electric transmission facilities; sells energy commodities; and owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets. The company had approximately 33,276 megawatts of net generating capacity; approximately 90,000 circuit miles of transmission and distribution lines; and 883 substations. It serves approximately 12 million people through approximately 5.9 million customer accounts in the east and lower west coasts of Florida. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in 2010. NextEra Energy, Inc. was founded in 1925 and is headquartered in Juno Beach, Florida.

About Exelon

Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.