ITC Holdings Corp. (NYSE: ITC) and Edison International (NYSE:EIX) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.
Valuation & Earnings
This table compares ITC Holdings Corp. and Edison International’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ITC Holdings Corp.||N/A||N/A||N/A||$1.54||29.55|
|Edison International||$12.08 billion||2.09||$4.10 billion||$4.27||18.18|
Edison International has higher revenue and earnings than ITC Holdings Corp.. Edison International is trading at a lower price-to-earnings ratio than ITC Holdings Corp., indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for ITC Holdings Corp. and Edison International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ITC Holdings Corp.||0||1||0||0||2.00|
Edison International has a consensus price target of $85.20, suggesting a potential upside of 9.77%. Given Edison International’s stronger consensus rating and higher probable upside, analysts plainly believe Edison International is more favorable than ITC Holdings Corp..
This table compares ITC Holdings Corp. and Edison International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ITC Holdings Corp.||26.73%||16.53%||3.82%|
ITC Holdings Corp. pays an annual dividend of $0.86 per share and has a dividend yield of 1.9%. Edison International pays an annual dividend of $2.17 per share and has a dividend yield of 2.8%. ITC Holdings Corp. pays out 55.8% of its earnings in the form of a dividend. Edison International pays out 50.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ITC Holdings Corp. has increased its dividend for 12 consecutive years and Edison International has increased its dividend for 5 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
84.2% of ITC Holdings Corp. shares are held by institutional investors. Comparatively, 81.5% of Edison International shares are held by institutional investors. 3.2% of ITC Holdings Corp. shares are held by company insiders. Comparatively, 0.4% of Edison International shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Edison International beats ITC Holdings Corp. on 7 of the 13 factors compared between the two stocks.
ITC Holdings Corp. Company Profile
ITC Holdings Corp. (ITC Holdings) is a holding company. The Company is engaged in owning, operating, maintaining and investing in transmission infrastructure. The Company’s business consists primarily of the electric transmission operations of its Regulated Operating Subsidiaries. Its Regulated Operating Subsidiaries include International Transmission Company (ITCTransmission), Michigan Electric Transmission Company, LLC (METC), ITC Midwest LLC (ITC Midwest). The operations performed by its Regulated Operating Subsidiaries fall into the various categories, such as asset planning; engineering, design and construction; maintenance, and real time operations. Its customers include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers. It owns and operates high-voltage systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma.
Edison International Company Profile
Edison International is the holding company of Southern California Edison Company (SCE). As of December 31, 2016, SCE, a public utility, was primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. The Company is also the parent company of Edison Energy Group, Inc. (Edison Energy Group), a holding company for subsidiaries engaged in pursuing competitive business opportunities across energy services and distributed solar to commercial and industrial customers. SCE’s projects include West of Devers, Mesa Substation, Alberhill System, Riverside Transmission Reliability, Eldorado-Lugo-Mohave Upgrade, Tehachapi and Coolwater-Lugo. As of December 31, 2016, the West of Devers Project consisted of upgrading and reconfiguring approximately 48 miles of existing 220 kilovolt (kV) transmission lines between the Devers, El Casco, Vista and San Bernardino substations.
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