Pacific Gas & Electric (NYSE:PCG – Get Free Report) and NextEra Energy (NYSE:NEE – Get Free Report) are both large-cap utilities companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.
Profitability
This table compares Pacific Gas & Electric and NextEra Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Pacific Gas & Electric | 12.25% | 12.48% | 2.78% |
| NextEra Energy | 32.40% | 12.28% | 3.75% |
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Pacific Gas & Electric and NextEra Energy, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Pacific Gas & Electric | 0 | 9 | 3 | 0 | 2.25 |
| NextEra Energy | 0 | 6 | 17 | 0 | 2.74 |
Volatility and Risk
Pacific Gas & Electric has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500. Comparatively, NextEra Energy has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.
Institutional and Insider Ownership
78.6% of Pacific Gas & Electric shares are held by institutional investors. Comparatively, 78.7% of NextEra Energy shares are held by institutional investors. 0.2% of Pacific Gas & Electric shares are held by company insiders. Comparatively, 0.2% of NextEra Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Pacific Gas & Electric and NextEra Energy”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Pacific Gas & Electric | $24.93 billion | 1.42 | $2.70 billion | $1.38 | 9.55 |
| NextEra Energy | $28.70 billion | 5.85 | $6.83 billion | $4.45 | 18.10 |
NextEra Energy has higher revenue and earnings than Pacific Gas & Electric. Pacific Gas & Electric is trading at a lower price-to-earnings ratio than NextEra Energy, indicating that it is currently the more affordable of the two stocks.
Dividends
Pacific Gas & Electric pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. NextEra Energy pays an annual dividend of $2.49 per share and has a dividend yield of 3.1%. Pacific Gas & Electric pays out 14.5% of its earnings in the form of a dividend. NextEra Energy pays out 56.0% 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 increased its dividend for 1 consecutive years and NextEra Energy has increased its dividend for 31 consecutive years. NextEra Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
NextEra Energy beats Pacific Gas & Electric on 13 of the 17 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 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.
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