Comparing Enel (OTCMKTS:ENLAY) & Pacific Gas & Electric (NYSE:PCG)

Pacific Gas & Electric (NYSE:PCG) and Enel (OTCMKTS:ENLAY) are both large-cap utilities companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Profitability

This table compares Pacific Gas & Electric and Enel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pacific Gas & Electric	10.93%	11.10%	2.42%
Enel	7.78%	12.47%	3.39%

Volatility and Risk

Pacific Gas & Electric has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Enel has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Institutional & Insider Ownership

78.6% of Pacific Gas & Electric shares are owned by institutional investors. 0.2% of Pacific Gas & Electric shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Pacific Gas & Electric and Enel”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pacific Gas & Electric	$24.76 billion	1.42	$2.51 billion	$1.19	13.45
Enel	$85.44 billion	1.21	$7.59 billion	$0.67	15.22

Enel has higher revenue and earnings than Pacific Gas & Electric. Pacific Gas & Electric is trading at a lower price-to-earnings ratio than Enel, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Pacific Gas & Electric and Enel, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pacific Gas & Electric	0	6	7	2	2.73
Enel	1	5	1	0	2.00

Pacific Gas & Electric presently has a consensus price target of $20.64, indicating a potential upside of 28.95%. Given Pacific Gas & Electric’s stronger consensus rating and higher probable upside, analysts clearly believe Pacific Gas & Electric is more favorable than Enel.

Dividends

Pacific Gas & Electric pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Enel pays an annual dividend of $0.29 per share and has a dividend yield of 2.8%. Pacific Gas & Electric pays out 8.4% of its earnings in the form of a dividend. Enel pays out 43.3% 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. Pacific Gas & Electric has raised its dividend for 1 consecutive years.

Summary

Pacific Gas & Electric beats Enel on 11 of the 18 factors compared between the two stocks.

About Pacific Gas & Electric

PG&E Corp. operates as a holding company, which engages in generation, transmission, and distribution of electricity and natural gas to customers. It specializes in energy, utility, power, gas, electricity, solar and sustainability. The company was founded in 1995 and is headquartered in Oakland, CA.

About Enel

Enel SpA operates as an integrated operator in electricity and gas industries worldwide. It generates, distributes, transmits, and sells electricity; transports and markets natural gas; and constructs and operates generation plants and distribution grids. The company also provides energy management services; e-vehicle charging infrastructure for public and private customers; and engages in the energy commodities business. It operates wind, thermal, hydroelectric, nuclear, solar photovoltaic, and geothermal power plants. The company was founded in 1962 and is headquartered in Rome, Italy.