Critical Analysis: Exelon (NASDAQ:EXC) vs. Terna Rete Elettrica Nazionale (OTCMKTS:TEZNY)

Terna Rete Elettrica Nazionale (OTCMKTS:TEZNY) and Exelon (NASDAQ:EXC) are both large-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Dividends

Terna Rete Elettrica Nazionale pays an annual dividend of $1.25 per share and has a dividend yield of 3.6%. Exelon pays an annual dividend of $1.68 per share and has a dividend yield of 3.7%. Exelon pays out 61.5% of its earnings in the form of a dividend. Exelon has raised its dividend for 3 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Terna Rete Elettrica Nazionale and Exelon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Terna Rete Elettrica Nazionale	N/A	N/A	N/A
Exelon	10.99%	9.81%	2.43%

Insider and Institutional Ownership

80.9% of Exelon shares are owned by institutional investors. 0.1% of Exelon shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Terna Rete Elettrica Nazionale has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Exelon has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500.

Earnings & Valuation

This table compares Terna Rete Elettrica Nazionale and Exelon”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terna Rete Elettrica Nazionale	$3.98 billion	5.82	$1.15 billion	N/A	N/A
Exelon	$25.33 billion	1.84	$2.77 billion	$2.73	16.71

Exelon has higher revenue and earnings than Terna Rete Elettrica Nazionale.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Terna Rete Elettrica Nazionale and Exelon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terna Rete Elettrica Nazionale	0	1	0	0	2.00
Exelon	1	13	4	0	2.17

Exelon has a consensus price target of $50.33, suggesting a potential upside of 10.32%. Given Exelon’s stronger consensus rating and higher probable upside, analysts clearly believe Exelon is more favorable than Terna Rete Elettrica Nazionale.

Summary

Exelon beats Terna Rete Elettrica Nazionale on 12 of the 15 factors compared between the two stocks.

About Terna Rete Elettrica Nazionale

Terna S.p.A., together with its subsidiaries, provides electricity transmission and dispatching services in Italy, other Euro-area countries, and internationally. It operates through Regulated, Non-Regulated, and International segments. The company is involved in the design, construction, management, development, operation, and maintenance of national transmission grid; dispatching and metering; and construction of storage systems. It also supplies transformers and cables; provides energy and connectivity services; and installs and operates interconnecting lines. In addition, the company designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids; industrial transformers for the steel and metals industries; special transformers for convertors used in electrochemical production; produces and sells marine and terrestrial cables; develops renewable energy projects; and undertakes private interconnector projects. Terna S.p.A. was founded in 1962 and is based in Rome, Italy.

About Exelon

Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.