Analyzing Hawaiian Electric Industries (NYSE:HE) & Edison International (NYSE:EIX)

Hawaiian Electric Industries (NYSE:HE) and Edison International (NYSE:EIX) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

Hawaiian Electric Industries has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Edison International has a beta of 0.04, meaning that its stock price is 96% less volatile than the S&P 500.

Profitability

This table compares Hawaiian Electric Industries and Edison International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hawaiian Electric Industries 7.27% 9.75% 1.60%
Edison International -1.94% 10.28% 2.48%

Dividends

Hawaiian Electric Industries pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Edison International pays an annual dividend of $2.45 per share and has a dividend yield of 3.8%. Hawaiian Electric Industries pays out 69.2% of its earnings in the form of a dividend. Edison International pays out 59.0% 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. Edison International has increased its dividend for 14 consecutive years. Edison International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

53.0% of Hawaiian Electric Industries shares are owned by institutional investors. Comparatively, 82.3% of Edison International shares are owned by institutional investors. 0.9% of Hawaiian Electric Industries shares are owned by insiders. Comparatively, 0.4% of Edison International shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Hawaiian Electric Industries and Edison International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hawaiian Electric Industries 1 1 0 0 1.50
Edison International 1 4 7 0 2.50

Hawaiian Electric Industries presently has a consensus target price of $35.50, suggesting a potential downside of 17.33%. Edison International has a consensus target price of $72.10, suggesting a potential upside of 12.94%. Given Edison International’s stronger consensus rating and higher probable upside, analysts clearly believe Edison International is more favorable than Hawaiian Electric Industries.

Earnings and Valuation

This table compares Hawaiian Electric Industries and Edison International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hawaiian Electric Industries $2.86 billion 1.64 $203.66 million $1.85 23.21
Edison International $12.66 billion 1.64 -$302.00 million $4.15 15.38

Hawaiian Electric Industries has higher earnings, but lower revenue than Edison International. Edison International 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.

Summary

Edison International beats Hawaiian Electric Industries on 12 of the 17 factors compared between the two stocks.

About Hawaiian Electric Industries

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.

About Edison International

Edison International, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in the United States. It generates electricity through hydroelectric, diesel/liquid petroleum gas, natural gas, nuclear, and photovoltaic sources. The company supplies electricity primarily to residential, commercial, industrial, agricultural, and other customers, as well as public authorities through transmission and distribution networks. Its transmission facilities consist of lines ranging from 33 kV to 500 kV and substations; and distribution system comprises approximately 53,000 line miles of overhead lines, 38,000 line miles of underground lines, and 800 substations located in California. The company serves approximately 5 million customers. Edison International was founded in 1886 and is based in Rosemead, California.

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