Unitil (UTL) & Duke Energy (DUK) Critical Contrast

Unitil (NYSE: UTL) and Duke Energy (NYSE:DUK) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Volatility and Risk

Unitil has a beta of 0.04, indicating that its stock price is 96% less volatile than the S&P 500. Comparatively, Duke Energy has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Unitil and Duke Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Unitil 1 1 1 0 2.00
Duke Energy 1 8 8 0 2.41

Unitil presently has a consensus price target of $48.67, indicating a potential downside of 1.90%. Duke Energy has a consensus price target of $83.27, indicating a potential upside of 2.94%. Given Duke Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Duke Energy is more favorable than Unitil.

Institutional and Insider Ownership

65.7% of Unitil shares are held by institutional investors. Comparatively, 59.1% of Duke Energy shares are held by institutional investors. 3.4% of Unitil shares are held by company insiders. Comparatively, 0.1% of Duke Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Unitil pays an annual dividend of $1.46 per share and has a dividend yield of 2.9%. Duke Energy pays an annual dividend of $3.56 per share and has a dividend yield of 4.4%. Unitil pays out 70.9% of its earnings in the form of a dividend. Duke Energy pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Unitil has increased its dividend for 3 consecutive years and Duke Energy has increased its dividend for 11 consecutive years. Duke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Unitil and Duke Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Unitil 7.61% 9.83% 2.67%
Duke Energy 11.52% 7.92% 2.40%

Valuation & Earnings

This table compares Unitil and Duke Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Unitil $406.20 million 1.82 $29.00 million $2.06 24.08
Duke Energy $23.57 billion 2.45 $3.06 billion $4.57 17.70

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

Summary

Duke Energy beats Unitil on 11 of the 17 factors compared between the two stocks.

Unitil Company Profile

Unitil Corporation, a public utility holding company, engages in the distribution of electricity and natural gas in the United States. It operates through three segments: Utility Gas Operations, Utility Electric Operations, and Non-Regulated. The company distributes electricity in the southeastern seacoast and state capital regions of New Hampshire, and the greater Fitchburg area of north central Massachusetts; and distributes natural gas in southeastern New Hampshire, portions of southern Maine to the Lewiston-Auburn area, and in the greater Fitchburg area of north central Massachusetts. It also operates 86 miles of interstate underground natural gas transmission pipeline that provides interstate natural gas pipeline access and transportation services primarily in Maine and New Hampshire. In addition, the company provides energy brokering and advisory services to commercial and industrial customers; and real estate management services. It serves approximately 105,000 electric customers and 81,300 natural gas customers. Unitil Corporation was incorporated in 1984 and is headquartered in Hampton, New Hampshire.

Duke Energy Company Profile

Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. It operates through three segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure, and Commercial Renewables. The Electric Utilities and Infrastructure segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest; uses coal, hydroelectric, natural gas, oil, renewable sources, and nuclear fuel to generate electricity; and engages in the wholesale of electricity to municipalities, electric cooperative utilities, and other load-serving entities. This segment serves approximately 7.6 million retail electric customers in 6 states in the Southeast and Midwest regions of the United States covering a service territory of approximately 95,000 square miles; and owns approximately 49,506 megawatts (MW) of generation capacity. The Gas Utilities and Infrastructure segment distributes natural gas to residential, commercial, industrial, and power generation natural gas customers; and owns, operates, and invests in various pipeline transmission and natural gas storage facilities. It has approximately 1.5 million customers, including 1 million customers located in North Carolina, South Carolina, and Tennessee, as well as 526,000 customers located in southwestern Ohio and northern Kentucky. The Commercial Renewables segment acquires, builds, develops, and operates wind and solar renewable generation projects, including nonregulated renewable energy and energy storage services to utilities, electric cooperatives, municipalities, and commercial and industrial customers. This segment has 21 wind and 63 solar facilities with a capacity of 2,907 MW across 14 states. The company was formerly known as Duke Energy Holding Corp. and changed its name to Duke Energy Corporation in April 2005. Duke Energy Corporation is headquartered in Charlotte, North Carolina.

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