Pinnacle West Capital (NYSE:PNW) and Hawaiian Electric Industries (NYSE:HE) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.
Insider and Institutional Ownership
86.8% of Pinnacle West Capital shares are held by institutional investors. Comparatively, 53.6% of Hawaiian Electric Industries shares are held by institutional investors. 0.4% of Pinnacle West Capital shares are held by company insiders. Comparatively, 0.9% of Hawaiian Electric Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Pinnacle West Capital pays an annual dividend of $2.95 per share and has a dividend yield of 3.1%. Hawaiian Electric Industries pays an annual dividend of $1.28 per share and has a dividend yield of 2.9%. Pinnacle West Capital pays out 65.0% of its earnings in the form of a dividend. Hawaiian Electric Industries pays out 69.2% 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 raised its dividend for 7 consecutive years. Pinnacle West Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Pinnacle West Capital and Hawaiian Electric Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pinnacle West Capital||13.84%||9.33%||2.82%|
|Hawaiian Electric Industries||7.07%||9.47%||1.55%|
Risk & Volatility
Pinnacle West Capital has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Hawaiian Electric Industries has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.
Valuation and Earnings
This table compares Pinnacle West Capital and Hawaiian Electric Industries’ 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||2.88||$511.05 million||$4.54||20.87|
|Hawaiian Electric Industries||$2.86 billion||1.70||$203.66 million||$1.85||24.09|
Pinnacle West Capital has higher revenue and earnings than Hawaiian Electric Industries. Pinnacle West Capital is trading at a lower price-to-earnings ratio than Hawaiian Electric Industries, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Pinnacle West Capital and Hawaiian Electric Industries, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pinnacle West Capital||3||7||3||0||2.00|
|Hawaiian Electric Industries||2||1||0||0||1.33|
Pinnacle West Capital presently has a consensus target price of $96.36, suggesting a potential upside of 1.68%. Hawaiian Electric Industries has a consensus target price of $36.33, suggesting a potential downside of 18.48%. Given Pinnacle West Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Pinnacle West Capital is more favorable than Hawaiian Electric Industries.
Pinnacle West Capital beats Hawaiian Electric Industries on 13 of the 17 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.
Hawaiian Electric Industries Company Profile
Hawaiian Electric Industries, Inc., through its subsidiaries, engages in the electric utility and banking businesses primarily in the state of Hawaii. The company's Electric Utility segment is involved in generating, purchasing, transmitting, distributing, and selling electric energy. Its renewable energy sources and potential sources include wind, solar, photovoltaic, geothermal, wave, hydroelectric, municipal waste, and other bio fuels. This segment distributes and sells electricity on the islands of Oahu, Hawaii, Maui, Lanai, and Molokai; and serves suburban communities, resorts, the United States armed forces installations, and agricultural operations. Its Bank segment operates a savings bank that offers banking and other financial services, including deposit products, such as savings accounts and checking accounts; and loans comprising residential and commercial real estate, residential mortgage, construction and development, multifamily residential and commercial real estate, consumer, and commercial loans to consumers and business. This segment operates 49 branches, including 34 branches in Oahu, 6 branches in Maui, 5 branches in Hawaii, 3 branches in Kauai, and 1 branch in Molokai. The company's Other segment focuses on investing in non-regulated renewable energy and infrastructure in the State of Hawaii. Hawaiian Electric Industries Inc. was founded in 1891 and is headquartered in Honolulu, Hawaii.
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