Reviewing El Paso Electric (EE) and Enel (ENLAY)

El Paso Electric (NYSE: EE) and Enel (OTCMKTS:ENLAY) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current ratings for El Paso Electric and Enel, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
El Paso Electric 1 2 0 0 1.67
Enel 0 1 1 0 2.50

El Paso Electric currently has a consensus price target of $54.00, suggesting a potential downside of 2.53%. Given El Paso Electric’s higher possible upside, research analysts clearly believe El Paso Electric is more favorable than Enel.

Valuation and Earnings

This table compares El Paso Electric and Enel’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
El Paso Electric $916.80 million 2.46 $98.26 million $2.42 22.89
Enel $78.13 billion 0.75 $2.84 billion N/A N/A

Enel has higher revenue and earnings than El Paso Electric.

Insider & Institutional Ownership

97.6% of El Paso Electric shares are owned by institutional investors. Comparatively, 0.1% of Enel shares are owned by institutional investors. 1.3% of El Paso Electric shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares El Paso Electric and Enel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
El Paso Electric 9.76% 8.20% 2.63%
Enel N/A N/A N/A

Risk & Volatility

El Paso Electric has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Enel has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Dividends

El Paso Electric pays an annual dividend of $1.34 per share and has a dividend yield of 2.4%. Enel pays an annual dividend of $0.13 per share and has a dividend yield of 2.3%. El Paso Electric pays out 55.4% of its earnings in the form of a dividend. El Paso Electric has increased its dividend for 6 consecutive years. El Paso Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

El Paso Electric beats Enel on 10 of the 16 factors compared between the two stocks.

El Paso Electric Company Profile

El Paso Electric Company, a public utility company, engages in the generation, transmission, and distribution of electricity in west Texas and southern New Mexico. It generates electricity through nuclear fuel, natural gas, and coal, as well as solar photovoltaic panels and wind turbines with a generating capability of approximately 2,082 megawatts. The company also sources electricity from purchased power. The company owns and has ownership interests in four 345 kilovolt (kv) transmission lines in New Mexico and Arizona; and three 500 kV lines in Arizona. It serves approximately 417,900 residential, commercial, and public authority customers; and distributes electricity to retail customers. El Paso Electric Company was founded in 1901 and is based in El Paso, Texas.

Enel Company Profile

Enel SpA, together with its subsidiaries, operates as an integrated electricity and gas company in Europe, Latin America, and internationally. The company generates, transmits, distributes, transport, and sells electricity; produces and distributes gas; and engages in the transport, storage, and regasification of LNG. It also engages in energy and infrastructure engineering; security, telecommunication, and real estate activities; management and maintenance of power plants; research and development in science and engineering; fuel supply; research and testing, analysis, consulting, and certification activities. In addition, the company is involved in the construction of port infrastructure; product, plant, and equipment certification; mining activities; marketing of energy products; analysis, design, construction, and maintenance of engineering works; insurance holding activities; personnel administration activities, as well as offers information technology and business services; and metering, remote control, and connectivity services through power line communication. Further, it designs, constructs, and operates merchant lines; prospects and develops hydrocarbon fields; offers public lighting systems, fuel trading and logistics, factoring, engineering and water systems, and solar panels; and engages in finance, environmental studies, and distance learning activities. It operates various hydroelectric, wind, geothermal, solar, thermoelectric, nuclear, and other biomass, and co-generation power plants with an installed capacity of approximately 83 gigawatts. The company was founded in 1962 and is headquartered in Rome, Italy.

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