NRG Energy (NYSE:NRG) & Edison International (NYSE:EIX) Head-To-Head Review

NRG Energy (NYSE:NRG) and Edison International (NYSE:EIX) are both large-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Insider & Institutional Ownership

97.7% of NRG Energy shares are held by institutional investors. Comparatively, 89.0% of Edison International shares are held by institutional investors. 0.9% of NRG Energy shares are held by insiders. Comparatively, 1.0% of Edison International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

NRG Energy has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Edison International has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares NRG Energy and Edison International’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NRG Energy	$28.82 billion	0.59	-$202.00 million	$7.06	11.54
Edison International	$16.34 billion	1.75	$1.41 billion	$2.28	32.68

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

Analyst Ratings

This is a breakdown of current ratings for NRG Energy and Edison International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NRG Energy	0	4	3	0	2.43
Edison International	1	4	5	0	2.40

NRG Energy presently has a consensus price target of $65.50, suggesting a potential downside of 19.35%. Edison International has a consensus price target of $76.00, suggesting a potential upside of 1.81%. Given Edison International’s higher possible upside, analysts clearly believe Edison International is more favorable than NRG Energy.

Dividends

NRG Energy pays an annual dividend of $1.63 per share and has a dividend yield of 2.0%. Edison International pays an annual dividend of $3.12 per share and has a dividend yield of 4.2%. NRG Energy pays out 23.1% of its earnings in the form of a dividend. Edison International pays out 136.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NRG Energy has increased its dividend for 5 consecutive years and Edison International has increased its dividend for 21 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares NRG Energy and Edison International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NRG Energy	5.76%	42.60%	4.11%
Edison International	6.14%	12.48%	2.44%

Summary

Edison International beats NRG Energy on 9 of the 17 factors compared between the two stocks.

About NRG Energy

NRG Energy, Inc., together with its subsidiaries, operates as an energy and home services company in the United States and Canada. It operates through Texas; East; West/Services/Other; Vivint Smart Home; and Corporate Activities segments. The company produces and sells electricity generated using coal, oil, solar, and battery storage; natural gas; and a cloud-based home platform, including hardware, software, sales, installation, customer service, technical support, and professional monitoring solutions. It offers retail electricity and energy management, line and surge protection products, HVAC installation, repair and maintenance, home protection products, carbon offsets, back-up power stations, portable power, portable solar, and portable lighting; retail services comprising demand response, commodity sales, energy efficiency, and energy management solutions; and system power, distributed generation, renewable and low-carbon products, carbon management and specialty services, backup generation, storage and distributed solar, and energy advisory services. In addition, the company trades in power, natural gas, and related commodities; environmental products; weather products; and financial products, including forwards, futures, options, and swaps. It offers its products and services under the NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint. It serves residential, commercial, government, industrial, and wholesale customers. NRG Energy, Inc. was founded in 1989 and is headquartered in Houston, Texas.

About Edison International

Edison International, through its subsidiaries, engages in the generation and distribution of electric power. The company supplies and delivers electricity to approximately 50,000 square mile area of southern California to residential, commercial, industrial, public authorities, agricultural, and other sectors. Its transmission facilities consist of lines ranging from 55 kV to 500 kV and approximately 80 transmission substations; distribution system consists of approximately 38,000 circuit-miles of overhead lines; approximately 31,000 circuit-miles of underground lines; and 730 distribution substations. The company was founded in 1886 and is based in Rosemead, California.