Head-To-Head Review: Avista (AVA) vs. PG&E (PCG)

Avista (NYSE:AVA) and PG&E (NYSE:PCG) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Avista and PG&E, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avista 1 1 0 0 1.50
PG&E 0 8 7 0 2.47

Avista presently has a consensus target price of $40.00, indicating a potential downside of 20.93%. PG&E has a consensus target price of $51.38, indicating a potential upside of 12.09%. Given PG&E’s stronger consensus rating and higher probable upside, analysts clearly believe PG&E is more favorable than Avista.

Valuation and Earnings

This table compares Avista and PG&E’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avista $1.45 billion 2.30 $115.91 million $1.95 25.94
PG&E $17.14 billion 1.38 $1.66 billion $3.68 12.46

PG&E has higher revenue and earnings than Avista. PG&E is trading at a lower price-to-earnings ratio than Avista, indicating that it is currently the more affordable of the two stocks.

Dividends

Avista pays an annual dividend of $1.49 per share and has a dividend yield of 2.9%. PG&E pays an annual dividend of $0.53 per share and has a dividend yield of 1.2%. Avista pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PG&E pays out 14.4% of its earnings in the form of a dividend. Avista has increased its dividend for 15 consecutive years and PG&E has increased its dividend for 2 consecutive years. Avista is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

76.4% of Avista shares are owned by institutional investors. Comparatively, 81.4% of PG&E shares are owned by institutional investors. 1.1% of Avista shares are owned by insiders. Comparatively, 0.1% of PG&E shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Avista has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500. Comparatively, PG&E has a beta of -0.07, indicating that its share price is 107% less volatile than the S&P 500.

Profitability

This table compares Avista and PG&E’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avista 7.90% 7.39% 2.33%
PG&E 0.80% 10.20% 2.86%

Summary

PG&E beats Avista on 10 of the 17 factors compared between the two stocks.

About Avista

Avista Corporation operates as an electric and natural gas utility company. It operates through two segments, Avista Utilities and AEL&P. The Avista Utilities segment provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho; and natural gas distribution services in parts of northeastern and southwestern Oregon, as well as generates electricity in Washington, Idaho, Oregon, and Montana. This segment also engages in the wholesale purchase and sale of electricity and natural gas. The AEL&P segment offers electric services to approximately 17,000 customers in the city and borough of Juneau, Alaska. The company generates electricity through hydro, thermal, and wind facilities. As of February 21, 2018, it supplied retail electric services to approximately 382,000 customers and retail natural gas service to approximately 347,000 customers. In addition, the company engages in sheet metal fabrication, venture fund investments, real estate investments, and other investments. Avista Corporation was founded in 1889 and is headquartered in Spokane, Washington.

About PG&E

PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to residential, commercial, industrial, and agricultural customers in northern and central California, the United States. The company's electricity distribution network consists of approximately 107,200 circuit miles of distribution lines, 59 transmission switching substations, and 605 distribution substations; and electricity transmission network comprises approximately 19,200 circuit miles of interconnected transmission lines and 92 electric transmission substations. Its natural gas system consists of approximately 42,800 miles of distribution pipelines, approximately 6,400 miles of backbone and local transmission pipelines, and various storage facilities. The company operates various electricity generation facilities, such as nuclear, hydroelectric, fossil fuel-fired, and solar. PG&E Corporation was founded in 1905 and is based in San Francisco, California.

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