Reviewing FirstEnergy (NYSE:FE) & OGE Energy (NYSE:OGE)

OGE Energy (NYSE:OGE) and FirstEnergy (NYSE:FE) 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, valuation, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent ratings and price targets for OGE Energy and FirstEnergy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OGE Energy	0	6	5	0	2.45
FirstEnergy	0	4	8	0	2.67

OGE Energy currently has a consensus target price of $50.00, indicating a potential downside of 1.96%. FirstEnergy has a consensus target price of $50.77, indicating a potential upside of 9.62%. Given FirstEnergy’s stronger consensus rating and higher probable upside, analysts plainly believe FirstEnergy is more favorable than OGE Energy.

Valuation and Earnings

This table compares OGE Energy and FirstEnergy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OGE Energy	$3.26 billion	3.23	$470.70 million	$2.65	19.25
FirstEnergy	$15.09 billion	1.78	$1.02 billion	$2.08	22.27

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

Profitability

This table compares OGE Energy and FirstEnergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OGE Energy	16.36%	10.97%	3.78%
FirstEnergy	7.40%	11.07%	2.73%

Volatility & Risk

OGE Energy has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, FirstEnergy has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500.

Dividends

OGE Energy pays an annual dividend of $1.72 per share and has a dividend yield of 3.4%. FirstEnergy pays an annual dividend of $1.86 per share and has a dividend yield of 4.0%. OGE Energy pays out 64.9% of its earnings in the form of a dividend. FirstEnergy pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OGE Energy has raised its dividend for 18 consecutive years and FirstEnergy has raised its dividend for 3 consecutive years.

Institutional and Insider Ownership

71.8% of OGE Energy shares are held by institutional investors. Comparatively, 89.4% of FirstEnergy shares are held by institutional investors. 0.6% of OGE Energy shares are held by company insiders. Comparatively, 0.1% of FirstEnergy shares are held by company 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.

Summary

FirstEnergy beats OGE Energy on 9 of the 17 factors compared between the two stocks.

About OGE Energy

OGE Energy Corp. is an energy holding company based in Oklahoma City. Its principal business is Oklahoma Gas and Electric Company (OG&E), a regulated electric utility that generates, transmits, distributes and sells electricity to residential, commercial and industrial customers. OG&E serves communities in Oklahoma and western Arkansas. Its operations include power plants and the electric infrastructure used to deliver electricity to customers across its service area. The utility traces its origins to 1902, when it began providing electricity in what was then Oklahoma Territory.

About FirstEnergy

FirstEnergy Corp. is an investor-owned electric utility holding company focused primarily on regulated electricity transmission and distribution. Through its utility subsidiaries, it delivers electricity to residential, commercial and industrial customers across parts of Ohio, Pennsylvania, New Jersey, West Virginia and Maryland. The company’s operations include maintaining local electric distribution networks and owning and operating high-voltage transmission infrastructure across portions of the Midwest and Mid-Atlantic.