Terna (OTCMKTS:TERRF – Get Free Report) and Exelon (NASDAQ:EXC – Get Free Report) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.
Dividends
Terna pays an annual dividend of $0.16 per share and has a dividend yield of 2.1%. Exelon pays an annual dividend of $1.44 per share and has a dividend yield of 3.5%. Terna pays out 61.8% of its earnings in the form of a dividend. Exelon pays out 67.9% 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. Exelon has increased its dividend for 1 consecutive years. Exelon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Terna and Exelon’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Terna | N/A | N/A | N/A | $0.26 | 29.97 |
| Exelon | $19.89 billion | 2.03 | $2.17 billion | $2.12 | 19.14 |
Analyst Ratings
This is a summary of recent ratings and target prices for Terna and Exelon, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Terna | 1 | 2 | 1 | 0 | 2.00 |
| Exelon | 1 | 2 | 7 | 0 | 2.60 |
Exelon has a consensus price target of $44.10, suggesting a potential upside of 8.67%. Given Exelon’s stronger consensus rating and higher possible upside, analysts clearly believe Exelon is more favorable than Terna.
Profitability
This table compares Terna and Exelon’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Terna | N/A | N/A | N/A |
| Exelon | 10.66% | 9.20% | 2.38% |
Insider and Institutional Ownership
20.2% of Terna shares are held by institutional investors. Comparatively, 81.4% of Exelon shares are held by institutional investors. 0.2% of Exelon shares are held by company 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.
Summary
Exelon beats Terna on 12 of the 14 factors compared between the two stocks.
About Terna
Terna S.p.A., together with its subsidiaries, engages in the electricity transmission and dispatching activities in Italy, Euro-area countries, and internationally. The company operates through Regulated, Non-Regulated, and International segments. It is involved in the planning, development, management, operation, and maintenance of national transmission grid; dispatching and metering; and construction of storage systems. The company also offers connectivity services, energy solutions, telecommunications systems and equipment, and operation and maintenance services. In addition, it designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids, industrial transformers for the steel and metals industries, and special transformers for convertors used in electrochemical production; designs, produces, and supplies marine and terrestrial cables; implements and develops renewable energy projects; and undertakes private interconnector projects. The company was founded in 1999 and is headquartered in Rome, Italy.
About Exelon
Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, cooperatives, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.
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