Analyzing Vectren (VVC) & The Competition

Vectren (NYSE: VVC) is one of 4 public companies in the “Gas & other services combined” industry, but how does it contrast to its competitors? We will compare Vectren to similar companies based on the strength of its institutional ownership, profitability, risk, valuation, dividends, earnings and analyst recommendations.

Dividends

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Vectren pays an annual dividend of $1.80 per share and has a dividend yield of 2.8%. Vectren pays out 69.2% of its earnings in the form of a dividend. As a group, “Gas & other services combined” companies pay a dividend yield of 2.9% and pay out 61.9% of their earnings in the form of a dividend. Vectren has raised its dividend for 58 consecutive years. Vectren lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings & Valuation

This table compares Vectren and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Vectren $2.66 billion $216.00 million 24.58
Vectren Competitors $5.08 billion $207.59 million 15.35

Vectren’s competitors have higher revenue, but lower earnings than Vectren. Vectren is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings for Vectren and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vectren 0 3 1 0 2.25
Vectren Competitors 29 126 117 4 2.35

Vectren currently has a consensus target price of $64.67, suggesting a potential upside of 1.17%. As a group, “Gas & other services combined” companies have a potential upside of 6.87%. Given Vectren’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Vectren has less favorable growth aspects than its competitors.

Risk and Volatility

Vectren has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Vectren’s competitors have a beta of 0.85, meaning that their average stock price is 15% less volatile than the S&P 500.

Profitability

This table compares Vectren and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vectren 8.13% 11.91% 3.62%
Vectren Competitors -1.02% 4.03% 0.16%

Insider & Institutional Ownership

64.1% of Vectren shares are held by institutional investors. Comparatively, 64.6% of shares of all “Gas & other services combined” companies are held by institutional investors. 0.1% of Vectren shares are held by insiders. Comparatively, 7.3% of shares of all “Gas & other services combined” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Vectren competitors beat Vectren on 10 of the 15 factors compared.

Vectren Company Profile

Vectren Corporation provides energy delivery services to residential, commercial, and industrial and other contract customers. The company offers natural gas distribution and transportation services, and electric transmission and distribution services; and owns and operates coal-fired, natural gas or oil-fired, and landfill gas electric generating facilities with an installed generating capacity of 1,248 megawatts. Its electric transmission system consists of approximately 1,028 circuit miles of 345, 138, and 69 kilovolt lines, and 34 substations; and distribution system comprises 4,543 circuit miles of lower voltage overhead lines and 462 trench miles of conduit containing 2,405 circuit miles of underground distribution cable, as well as 85 distribution substations and 54,919 distribution transformers. The company also provides underground pipeline construction and repair services; and energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects, as well as invests in energy-related opportunities and services. It serves various industries comprising automotive assembly, parts, and accessories; feed, flour, and grain processing; metal castings and plastic products; gypsum products; electrical equipment, metal specialties, and glass and steel finishing; pharmaceutical and nutritional products; gasoline and oil products; ethanol; and coal mining. The company supplies natural gas services to approximately 1,022,000 customers in Indiana and Ohio; and electric services to approximately 145,200 customers in Indiana. Vectren Corporation was incorporated in 1999 and is headquartered in Evansville, Indiana.

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