Critical Survey: Hydro One (OTCMKTS:HRNNF) and FirstEnergy (NYSE:FE)

Hydro One (OTCMKTS:HRNNF) and FirstEnergy (NYSE:FE) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares Hydro One and FirstEnergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hydro One	N/A	N/A	N/A
FirstEnergy	3.55%	12.41%	2.93%

Analyst Recommendations

This is a summary of recent ratings and target prices for Hydro One and FirstEnergy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hydro One	0	1	0	0	2.00
FirstEnergy	1	5	4	0	2.30

Hydro One presently has a consensus target price of $31.50, suggesting a potential upside of 20.46%. FirstEnergy has a consensus target price of $41.40, suggesting a potential upside of 12.16%. Given Hydro One’s higher probable upside, equities research analysts clearly believe Hydro One is more favorable than FirstEnergy.

Insider & Institutional Ownership

82.3% of FirstEnergy shares are held by institutional investors. 0.1% of FirstEnergy 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.

Valuation & Earnings

This table compares Hydro One and FirstEnergy’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hydro One	N/A	N/A	N/A	N/A	N/A
FirstEnergy	$12.89 billion	1.64	$406.00 million	$0.79	46.72

FirstEnergy has higher revenue and earnings than Hydro One.

Summary

FirstEnergy beats Hydro One on 8 of the 9 factors compared between the two stocks.

About Hydro One

Hydro One Limited, through its subsidiaries, operates as an electricity transmission and distribution company in Ontario. The company operates through three segments: Transmission, Distribution, and Other. It owns and operates high-voltage transmission lines and primary low-voltage distribution network. The company serves residential, small business, commercial, and industrial customers, as well as municipal utilities. It also provides telecommunications support services for its transmission and distribution businesses; and information and communications technology services and solutions. The company was incorporated in 2015 and is headquartered in Toronto, Canada.

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.