Financial Contrast: MGE Energy (NASDAQ:MGEE) versus Eversource Energy (NYSE:ES)

Eversource Energy (NYSE:ES) and MGE Energy (NASDAQ:MGEE) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eversource Energy	3	6	4	0	2.08
MGE Energy	1	1	1	0	2.00

Eversource Energy presently has a consensus price target of $72.92, suggesting a potential upside of 2.60%. MGE Energy has a consensus price target of $77.50, suggesting a potential downside of 1.91%. Given Eversource Energy’s stronger consensus rating and higher probable upside, equities analysts clearly believe Eversource Energy is more favorable than MGE Energy.

Dividends

Eversource Energy pays an annual dividend of $3.15 per share and has a dividend yield of 4.4%. MGE Energy pays an annual dividend of $1.90 per share and has a dividend yield of 2.4%. Eversource Energy pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGE Energy pays out 46.7% of its earnings in the form of a dividend. Eversource Energy has increased its dividend for 2 consecutive years and MGE Energy has increased its dividend for 49 consecutive years.

Volatility and Risk

Eversource Energy has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, MGE Energy has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Insider & Institutional Ownership

80.0% of Eversource Energy shares are held by institutional investors. Comparatively, 52.6% of MGE Energy shares are held by institutional investors. 0.2% of Eversource Energy shares are held by insiders. Comparatively, 0.4% of MGE Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eversource Energy	10.35%	11.33%	2.91%
MGE Energy	19.45%	11.10%	4.74%

Earnings and Valuation

This table compares Eversource Energy and MGE Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eversource Energy	$13.55 billion	1.98	$1.69 billion	$3.86	18.41
MGE Energy	$743.65 million	4.01	$135.89 million	$4.07	19.41

Eversource Energy has higher revenue and earnings than MGE Energy. Eversource Energy is trading at a lower price-to-earnings ratio than MGE Energy, indicating that it is currently the more affordable of the two stocks.

Summary

MGE Energy beats Eversource Energy on 9 of the 17 factors compared between the two stocks.

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.

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.