Head to Head Review: Avista (AVA) & SCANA (SCG)

Avista (NYSE: AVA) and SCANA (NYSE:SCG) are both mid-cap utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Institutional and Insider Ownership

80.4% of Avista shares are owned by institutional investors. Comparatively, 66.7% of SCANA shares are owned by institutional investors. 1.1% of Avista shares are owned by company insiders. Comparatively, 0.4% of SCANA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Avista and SCANA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avista 7.66% 7.25% 2.27%
SCANA -2.74% 10.80% 3.14%

Valuation & Earnings

This table compares Avista and SCANA’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avista $1.45 billion 2.39 $115.91 million $1.95 26.96
SCANA $4.41 billion 1.11 -$119.00 million $4.20 8.17

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

Volatility and Risk

Avista has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500. Comparatively, SCANA has a beta of 0.2, meaning that its stock price is 80% less volatile than the S&P 500.

Dividends

Avista pays an annual dividend of $1.49 per share and has a dividend yield of 2.8%. SCANA pays an annual dividend of $2.45 per share and has a dividend yield of 7.1%. Avista pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SCANA pays out 58.3% of its earnings in the form of a dividend. Avista has raised its dividend for 15 consecutive years and SCANA has raised its dividend for 18 consecutive years. SCANA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Avista and SCANA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avista 1 2 0 0 1.67
SCANA 2 7 2 0 2.00

Avista currently has a consensus target price of $46.50, indicating a potential downside of 11.55%. SCANA has a consensus target price of $48.63, indicating a potential upside of 41.68%. Given SCANA’s stronger consensus rating and higher possible upside, analysts clearly believe SCANA is more favorable than Avista.

Summary

SCANA beats Avista on 10 of the 17 factors compared between the two stocks.

Avista Company Profile

Avista Corporation operates as an electric and natural gas utility company. It operates through two segments, Avista Utilities and AEL&P. The Avista Utilities segment provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho; and natural gas distribution services in parts of northeastern and southwestern Oregon, as well as generates electricity in Washington, Idaho, Oregon, and Montana. This segment also engages in the wholesale purchase and sale of electricity and natural gas. The AEL&P segment offers electric services to approximately 17,000 customers in the city and borough of Juneau, Alaska. The company generates electricity through hydro, thermal, and wind facilities. As of February 21, 2018, it supplied retail electric services to approximately 382,000 customers and retail natural gas service to approximately 347,000 customers. In addition, the company engages in sheet metal fabrication, venture fund investments, real estate investments, and other investments. Avista Corporation was founded in 1889 and is headquartered in Spokane, Washington.

SCANA Company Profile

SCANA Corporation, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity to retail and wholesale customers in the United States. The company owns nuclear, coal, hydro, natural gas, oil, biomass, and solar generating facilities. It also purchases, sells, and transports natural gas; and offers energy-related services. As of December 31, 2017, the company provided electricity to approximately 719,000 customers; and natural gas to approximately 931,000 retail customers in South Carolina and North Carolina, as well as marketed natural gas to approximately 425,000 customers in Georgia. It serves municipalities, electric cooperatives, other investor-owned utilities, registered marketers, and federal and state electric agencies, as well as chemical, educational service, paper product, food product, lumber and wood product, health service, textile manufacturing, rubber and miscellaneous plastic product, automotive and tire, and fabricated metal product industries. The company was founded in 1924 and is based in Cayce, South Carolina.

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