Head-To-Head Survey: Severn Trent (OTCMKTS:STRNY) versus Pennon Group (OTCMKTS:PEGRY)

Pennon Group (OTCMKTS:PEGRY – Get Rating) and Severn Trent (OTCMKTS:STRNY – Get Rating) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Pennon Group and Severn Trent, as provided by MarketBeat.com.

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Pennon Group presently has a consensus price target of $1,048.00, suggesting a potential upside of 5,418.69%. Severn Trent has a consensus price target of $2,932.50, suggesting a potential upside of 8,450.81%. Given Severn Trent’s stronger consensus rating and higher probable upside, analysts plainly believe Severn Trent is more favorable than Pennon Group.

Dividends

Pennon Group pays an annual dividend of $0.17 per share and has a dividend yield of 0.9%. Severn Trent pays an annual dividend of $1.47 per share and has a dividend yield of 4.3%. Pennon Group pays out 29.4% of its earnings in the form of a dividend. Severn Trent pays out 179.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares Pennon Group and Severn Trent’s top-line revenue, earnings per share (EPS) and valuation.

Pennon Group is trading at a lower price-to-earnings ratio than Severn Trent, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

0.1% of Severn Trent shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Pennon Group and Severn Trent’s net margins, return on equity and return on assets.

Summary

Severn Trent beats Pennon Group on 7 of the 8 factors compared between the two stocks.

About Pennon Group

(Get Rating)

Pennon Group Plc provides clean water and wastewater services in the United Kingdom. It provides water and wastewater services for customers in Cornwall, Devon, and parts of Dorset and Somerset; water-only services in the areas of Dorset, Hampshire, and Wiltshire; and water and wastewater retail services to non-household customers in Great Britain. The company also offers regulated water to approximately 1.2 million customers in the Bristol region. It serves approximately 50 million household and non-household customers. The company was incorporated in 1989 and is based in Exeter, the United Kingdom.

About Severn Trent

(Get Rating)

Severn Trent PLC operates as a water and sewerage company in England and Wales. It operates in two segments, Regulated Water and Waste Water, and Business Services. The Regulated Water and Waste Water segment offers water and waste water services to approximately 4.8 million households and businesses in the Midlands and Wales. The Business Services segment generates renewable energy from anaerobic digestion, hydropower, wind turbines, and solar technology; manages and sells land; and offers search services. It also provides contract services to municipal and industrial clients in the United Kingdom; and the United Kingdom Ministry of Defense for design, build, and operation of water and waste water treatment facilities and networks, as well as services to developers. The company was founded in 1974 and is headquartered in Coventry, the United Kingdom.

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