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Critical Survey: Hawaiian Electric Industries (HE) vs. Entergy (ETR)

Hawaiian Electric Industries (NYSE: HE) and Entergy (NYSE:ETR) are both utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Earnings & Valuation

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This table compares Hawaiian Electric Industries and Entergy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hawaiian Electric Industries $2.56 billion 1.41 $167.18 million $1.65 20.08
Entergy $11.07 billion 1.25 $425.35 million $7.20 10.59

Entergy has higher revenue and earnings than Hawaiian Electric Industries. Entergy 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.

Dividends

Hawaiian Electric Industries pays an annual dividend of $1.24 per share and has a dividend yield of 3.7%. Entergy pays an annual dividend of $3.56 per share and has a dividend yield of 4.7%. Hawaiian Electric Industries pays out 75.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Entergy pays out 49.4% of its earnings in the form of a dividend. Entergy has increased its dividend for 3 consecutive years. Entergy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

50.4% of Hawaiian Electric Industries shares are held by institutional investors. Comparatively, 87.0% of Entergy shares are held by institutional investors. 0.9% of Hawaiian Electric Industries shares are held by insiders. Comparatively, 0.2% of Entergy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Hawaiian Electric Industries and Entergy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hawaiian Electric Industries 2 1 0 0 1.33
Entergy 0 5 6 0 2.55

Hawaiian Electric Industries presently has a consensus target price of $31.67, indicating a potential downside of 4.45%. Entergy has a consensus target price of $85.35, indicating a potential upside of 11.92%. Given Entergy’s stronger consensus rating and higher possible upside, analysts plainly believe Entergy is more favorable than Hawaiian Electric Industries.

Volatility and Risk

Hawaiian Electric Industries has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Entergy has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Hawaiian Electric Industries 6.64% 8.96% 1.46%
Entergy 4.21% 16.19% 2.87%

Summary

Entergy beats Hawaiian Electric Industries on 13 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, sugarcane waste, 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, checking accounts, money market accounts, and certificates of deposit; 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. Hawaiian Electric Industries Inc. was founded in 1891 and is headquartered in Honolulu, Hawaii.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and distribution of electricity in the United States. It generates electricity through gas/oil, nuclear, coal, hydro, and solar power sources. The company's Utility segment generates, transmits, distributes, and sells electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and distributes natural gas. Its Entergy Wholesale Commodities segment engages in the ownership, operation, and decommissioning of nuclear power plants located in the northern United States; sale of electric power to wholesale customers; provision of services to other nuclear power plant owners; and owning interests in non-nuclear power plants that sell electric power to wholesale customers. This segment sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company's power plants have approximately 30,000 megawatts (MW) of electric generating capacity, including approximately 9,000 MW of nuclear power. The company delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1949 and is based in New Orleans, Louisiana.