Avista Corporation (NYSE: AVA) and Sempra Energy (NYSE:SRE) are both mid-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Analyst Ratings

This is a summary of current ratings for Avista Corporation and Sempra Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avista Corporation 1 3 0 0 1.75
Sempra Energy 0 2 4 0 2.67

Avista Corporation currently has a consensus price target of $44.00, indicating a potential downside of 14.78%. Sempra Energy has a consensus price target of $121.60, indicating a potential upside of 2.16%. Given Sempra Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Sempra Energy is more favorable than Avista Corporation.

Volatility and Risk

Avista Corporation has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Dividends

Avista Corporation pays an annual dividend of $1.43 per share and has a dividend yield of 2.8%. Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 2.8%. Avista Corporation pays out 67.8% of its earnings in the form of a dividend. Sempra Energy pays out 48.7% 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. Avista Corporation has increased its dividend for 6 consecutive years and Sempra Energy has increased its dividend for 14 consecutive years.

Profitability

This table compares Avista Corporation and Sempra Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avista Corporation 9.35% 8.19% 2.57%
Sempra Energy 15.51% 9.11% 2.84%

Institutional & Insider Ownership

69.7% of Avista Corporation shares are held by institutional investors. Comparatively, 81.2% of Sempra Energy shares are held by institutional investors. 1.1% of Avista Corporation shares are held by insiders. Comparatively, 0.2% of Sempra Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Avista Corporation and Sempra Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avista Corporation $1.46 billion 2.28 $471.76 million $2.11 24.47
Sempra Energy $10.97 billion 2.72 $3.71 billion $6.75 17.63

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

Summary

Sempra Energy beats Avista Corporation on 14 of the 17 factors compared between the two stocks.

About Avista Corporation

Avista Corporation is an electric and natural gas utility company. The Company operates through two segments: Avista Utilities, and Alaska Electric Light and Power Company (AEL&P). The Company’s regional services include government and higher education, medical services, retail trade and finance. The Company’s businesses also include sheet metal fabrication, venture fund investments, real estate investments, a company that explores markets that could be served with liquefied natural gas (LNG), as well as certain other investments of Avista Capital, which is a subsidiary of the Company. Avista Utilities is an operating division of the Company, which consists of its regulated utility operations in the Pacific Northwest. Avista Utilities division generates, transmits and distributes electricity, and distributes natural gas. As of December 31, 2016, AEL&P operated five hydroelectric generation facilities with 102.7 megawatts (MW) of hydroelectric generation capacity.

About Sempra Energy

Sempra Energy is a holding company. The Company’s principal operating units are Sempra Utilities, which includes its San Diego Gas & Electric Company (SDG&E), Southern California Gas Company (SoCalGas) and Sempra South American Utilities segments, and Sempra Infrastructure, which includes its Sempra Mexico, Sempra Renewables and Sempra LNG & Midstream segments. As of December 31, 2016, SDG&E’s service area covered 4,100 square miles. Sempra South American Utilities operates Chilquinta Energia, which serves customers in the region of Valparaiso in central Chile. As of December 31, 2016, SoCalGas had natural gas franchises with the 12 counties and the 223 cities in its service territory. Sempra LNG & Midstream owns land in Simpson County, Mississippi Hub. Sempra LNG & Midstream owns land in Port Arthur, Texas. Sempra Renewables has operations, investments or development projects in the various United States markets.

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