Comparing FirstEnergy (NYSE:FE) and Alliant Energy (NASDAQ:LNT)

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

Volatility and Risk

FirstEnergy has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Alliant Energy has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

Profitability

This table compares FirstEnergy and Alliant Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstEnergy	9.19%	11.15%	2.90%
Alliant Energy	19.14%	12.02%	3.65%

Analyst Ratings

This is a summary of current ratings for FirstEnergy and Alliant Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstEnergy	0	6	7	1	2.64
Alliant Energy	1	2	5	0	2.50

FirstEnergy currently has a consensus price target of $48.75, indicating a potential upside of 8.66%. Alliant Energy has a consensus price target of $70.86, indicating a potential upside of 8.61%. Given FirstEnergy’s stronger consensus rating and higher possible upside, equities analysts plainly believe FirstEnergy is more favorable than Alliant Energy.

Earnings and Valuation

This table compares FirstEnergy and Alliant Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstEnergy	$13.47 billion	1.92	$978.00 million	$2.29	19.59
Alliant Energy	$3.98 billion	4.21	$690.00 million	$3.18	20.52

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

Institutional & Insider Ownership

89.4% of FirstEnergy shares are held by institutional investors. Comparatively, 79.9% of Alliant Energy shares are held by institutional investors. 0.2% of FirstEnergy shares are held by insiders. Comparatively, 0.3% of Alliant 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.

Dividends

FirstEnergy pays an annual dividend of $1.78 per share and has a dividend yield of 4.0%. Alliant Energy pays an annual dividend of $2.03 per share and has a dividend yield of 3.1%. FirstEnergy pays out 77.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alliant Energy pays out 63.8% of its earnings in the form of a dividend. FirstEnergy has increased its dividend for 3 consecutive years and Alliant Energy has increased its dividend for 22 consecutive years.

Summary

Alliant Energy beats FirstEnergy on 9 of the 17 factors compared between the two stocks.

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.

About Alliant Energy

Alliant Energy Corporation operates as a utility holding company that provides regulated electricity and natural gas services in the United States. It operates in three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other. The company, through its subsidiary, Interstate Power and Light Company (IPL), primarily generates and distributes electricity, and distributes and transports natural gas to retail customers in Iowa; sells electricity to wholesale customers in Minnesota, Illinois, and Iowa; and generates and distributes steam in Cedar Rapids, Iowa. Alliant Energy Corporation, through its other subsidiary, Wisconsin Power and Light Company (WPL), generates and distributes electricity, and distributes and transports natural gas to retail customers in Wisconsin; and sells electricity to wholesale customers in Wisconsin. It serves retail customers in the farming, agriculture, industrial manufacturing, chemical, packaging, and food industries, as well as wholesale customers comprising municipalities and rural electric cooperatives. In addition, the company owns and operates a short-line rail freight service in Iowa; a Mississippi River barge, rail, and truck freight terminal in Illinois; freight brokerage services; wind turbine blade recycling services; and a rail-served warehouse in Iowa. Further, it holds interests in a natural gas-fired electric generating unit near Sheboygan Falls, Wisconsin; and a wind farm located in Oklahoma. The company was formerly known as Interstate Energy Corp. and changed its name to Alliant Energy Corporation in May 1999. Alliant Energy Corporation was incorporated in 1981 and is headquartered in Madison, Wisconsin.