Pinnacle West Capital (NYSE:PNW) and IDACORP (NYSE:IDA) are both utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, valuation, earnings and dividends.
Institutional and Insider Ownership
85.2% of Pinnacle West Capital shares are held by institutional investors. Comparatively, 76.5% of IDACORP shares are held by institutional investors. 0.4% of Pinnacle West Capital shares are held by insiders. Comparatively, 0.5% of IDACORP shares are held by 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.
This is a breakdown of recent ratings and price targets for Pinnacle West Capital and IDACORP, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pinnacle West Capital||2||7||2||0||2.00|
Pinnacle West Capital presently has a consensus target price of $91.90, indicating a potential downside of 2.33%. IDACORP has a consensus target price of $96.00, indicating a potential downside of 4.41%. Given Pinnacle West Capital’s higher possible upside, equities research analysts plainly believe Pinnacle West Capital is more favorable than IDACORP.
Volatility & Risk
Pinnacle West Capital has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500. Comparatively, IDACORP has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500.
This table compares Pinnacle West Capital and IDACORP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pinnacle West Capital||14.06%||9.84%||2.98%|
Pinnacle West Capital pays an annual dividend of $2.95 per share and has a dividend yield of 3.1%. IDACORP pays an annual dividend of $2.52 per share and has a dividend yield of 2.5%. Pinnacle West Capital pays out 65.0% of its earnings in the form of a dividend. IDACORP pays out 56.1% 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. Pinnacle West Capital has increased its dividend for 7 consecutive years and IDACORP has increased its dividend for 7 consecutive years.
Valuation and Earnings
This table compares Pinnacle West Capital and IDACORP’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pinnacle West Capital||$3.69 billion||2.86||$511.05 million||$4.54||20.72|
|IDACORP||$1.37 billion||3.69||$226.80 million||$4.49||22.37|
Pinnacle West Capital has higher revenue and earnings than IDACORP. Pinnacle West Capital is trading at a lower price-to-earnings ratio than IDACORP, indicating that it is currently the more affordable of the two stocks.
IDACORP beats Pinnacle West Capital on 8 of the 15 factors compared between the two stocks.
Pinnacle West Capital Company Profile
Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. It generates, transmits, and distributes electricity using coal, nuclear, gas, oil, and solar generating facilities. The company serves approximately 1.2 million customers. It owns or leases approximately 6,015 megawatts of regulated generation capacity. The company was incorporated in 1985 and is headquartered in Phoenix, Arizona.
IDACORP Company Profile
IDACORP, Inc., through its subsidiary, Idaho Power Company, engages in the generation, transmission, distribution, purchase, and sale of electric energy in the United States. The company operates 17 hydroelectric generating plants located in southern Idaho and eastern Oregon; 3 natural gas-fired plants in southern Idaho; and interests in 3 coal-fired steam electric generating plants located in Wyoming, Nevada, and Oregon. As of December 31, 2018, it also had approximately 4,816 pole-miles of high-voltage transmission lines; 24 step-up transmission substations located at power plants; 21 transmission substations; 9 switching stations; 32 mixed-use transmission and distribution substations; 183 energized distribution substations; and 27,569 pole-miles of distribution lines, as well as provides electric utility services to approximately 558,000 retail customers in southern Idaho and eastern Oregon. The company's principal commercial and industrial customers are involved in food processing, electronics and general manufacturing, agriculture, health care, and winter recreation activities. IDACORP, Inc., through its other subsidiaries, invests in housing and other real estate investments. The company was founded in 1915 and is headquartered in Boise, Idaho.
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