Critical Contrast: Public Service Enterprise Group (NYSE:PEG) vs. PPL (NYSE:PPL)

PPL (NYSE:PPL) and Public Service Enterprise Group (NYSE:PEG) are both large-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Dividends

PPL pays an annual dividend of $1.09 per share and has a dividend yield of 3.1%. Public Service Enterprise Group pays an annual dividend of $2.52 per share and has a dividend yield of 3.1%. PPL pays out 73.6% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 60.6% 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. PPL has increased its dividend for 3 consecutive years and Public Service Enterprise Group has increased its dividend for 14 consecutive years. Public Service Enterprise Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for PPL and Public Service Enterprise Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PPL	0	2	8	2	3.00
Public Service Enterprise Group	0	5	9	0	2.64

PPL currently has a consensus price target of $41.20, suggesting a potential upside of 17.82%. Public Service Enterprise Group has a consensus price target of $90.96, suggesting a potential upside of 12.69%. Given PPL’s stronger consensus rating and higher probable upside, equities analysts plainly believe PPL is more favorable than Public Service Enterprise Group.

Earnings & Valuation

This table compares PPL and Public Service Enterprise Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PPL	$8.46 billion	3.06	$888.00 million	$1.48	23.63
Public Service Enterprise Group	$10.29 billion	3.92	$1.77 billion	$4.16	19.40

Public Service Enterprise Group has higher revenue and earnings than PPL. Public Service Enterprise Group is trading at a lower price-to-earnings ratio than PPL, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PPL and Public Service Enterprise Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PPL	12.16%	9.08%	3.06%
Public Service Enterprise Group	17.77%	12.62%	3.74%

Volatility & Risk

PPL has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Insider & Institutional Ownership

77.0% of PPL shares are owned by institutional investors. Comparatively, 73.3% of Public Service Enterprise Group shares are owned by institutional investors. 0.3% of PPL shares are owned by insiders. Comparatively, 0.2% of Public Service Enterprise Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Public Service Enterprise Group beats PPL on 11 of the 18 factors compared between the two stocks.

About PPL

PPL Corporation, an energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States. It operates through three segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.

About Public Service Enterprise Group

Public Service Enterprise Group Incorporated, through its subsidiaries, operates in electric and gas utility business in the United States. It operates through PSE&G and PSEG Power segments. The PSE&G segment transmits electricity; distributes electricity and natural gas to residential, commercial, and industrial customers; and appliance services and repairs to customers through its service territory, as well as invests in solar generation projects, and energy efficiency and related programs. The PSEG Power segment engages in nuclear generation businesses; and supplies power and natural gas to nuclear power plants and gas storage facilities activities. As of December 31, 2023, it had electric transmission and distribution system of 25,000 circuit miles and 866,600 poles; 56 switching stations with an installed capacity of 39,953 megavolt-amperes (MVA), and 235 substations with an installed capacity of 10,382 MVA; 109 MVA aggregate installed capacity for substations; four electric distribution headquarters and five electric sub-headquarters; 18,000 miles of gas mains, 12 gas distribution headquarters, two sub-headquarters, and one meter shop, as well as 56 natural gas metering and regulating stations; and 158 MegaWatts defined conditions of installed PV solar capacity. Public Service Enterprise Group Incorporated was founded in 1903 and is based in Newark, New Jersey.