Comparing RWE (OTCMKTS:RWEOY) and Exelon (NASDAQ:EXC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Exelon	10.17%	9.75%	2.41%
RWE	21.25%	5.34%	2.10%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exelon	$24.26 billion	1.95	$2.77 billion	$2.57	17.76
RWE	$19.94 billion	2.40	$3.54 billion	$5.26	12.55

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

Institutional and Insider Ownership

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

Dividends

Exelon pays an annual dividend of $1.68 per share and has a dividend yield of 3.7%. RWE pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. Exelon pays out 65.4% of its earnings in the form of a dividend. RWE pays out 19.0% 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. Exelon has increased its dividend for 3 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for Exelon and RWE, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exelon	1	14	5	0	2.20
RWE	0	5	3	0	2.38

Exelon currently has a consensus target price of $48.33, suggesting a potential upside of 5.88%. Given Exelon’s higher probable upside, analysts clearly believe Exelon is more favorable than RWE.

Risk and Volatility

Exelon has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, RWE has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Summary

Exelon beats RWE on 10 of the 17 factors compared between the two stocks.

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.

About RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.