Financial Analysis: EuroSite Power (OTCMKTS:EUSP) versus MGE Energy (NASDAQ:MGEE)

MGE Energy (NASDAQ:MGEE) and EuroSite Power (OTCMKTS:EUSP) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for MGE Energy and EuroSite Power, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGE Energy	1	0	0	0	1.00
EuroSite Power	0	0	0	0	N/A

MGE Energy currently has a consensus target price of $74.00, indicating a potential downside of 18.71%. Given MGE Energy’s higher probable upside, equities research analysts plainly believe MGE Energy is more favorable than EuroSite Power.

Earnings & Valuation

This table compares MGE Energy and EuroSite Power”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGE Energy	$662.23 million	4.97	$117.70 million	$3.32	27.42
EuroSite Power	$7.56 million	0.66	$470,000.00	N/A	N/A

MGE Energy has higher revenue and earnings than EuroSite Power.

Profitability

This table compares MGE Energy and EuroSite Power’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGE Energy	17.45%	10.04%	4.33%
EuroSite Power	5.05%	3.68%	3.20%

Volatility and Risk

MGE Energy has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, EuroSite Power has a beta of 0.03, indicating that its stock price is 97% less volatile than the S&P 500.

Insider and Institutional Ownership

52.6% of MGE Energy shares are held by institutional investors. 0.2% of MGE Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

MGE Energy beats EuroSite Power on 10 of the 10 factors compared between the two stocks.

About MGE Energy

MGE Energy, Inc., through its subsidiaries, operates as a public utility holding company primarily in the United States. It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other segments. The company generates, purchases, and distributes electricity and natural gas in Wisconsin and Iowa; owns and leases electric generating capacity; and plans, constructs, operates, maintains, and expands transmission facilities to provide transmission power services. It generates electricity from coal-fired, gas-fired, and renewable energy sources. As of December 31, 2023, the company owned and operated 835 miles of overhead electric distribution lines; 1,330 miles of underground electric distribution cables; 49 substations with an installed capacity of 1.2 million kVA; and gas facilities, including 3,066 miles of distribution mains, as well as supplied electric service to approximately 163,000 customers. MGE Energy, Inc. founded in 2001 and is headquartered in Madison, Wisconsin.

About EuroSite Power

EuroSite Power Inc., owns, operates, and distributes on-site energy systems in the United Kingdom and Europe. Its energy systems produces and supplies electricity, heat, hot water, and cooling solutions to commercial and industrial customers, such as healthcare facilities, hotels, multi-family hotels, multi-family residential buildings, leisure centers, industrial buildings, and schools and colleges. The company was founded in 2010 and is headquartered in Waltham, Massachusetts.