FirstEnergy Corporation (FE) vs Fortis (FTS)

FirstEnergy Corporation and Fortis are both Utilities Regulated Electric companies. FirstEnergy Corporation and Fortis are of similar size ($27.9B and $26.4B). Fortis trades at the lower P/E: 22.6× against 24.6×. FirstEnergy Corporation grew revenue faster over the last twelve months: 12.6% against 5.32%. Fortis has the higher net margin (14.0% vs 6.86%) and the higher return on invested capital (3.46% vs 3.34%). Both pay a dividend; FirstEnergy Corporation yields more (3.94% vs 3.31%). Across the 22 metrics below, Fortis leads on 13 and FirstEnergy Corporation on 9.

Valuation

Metric FE FTS Utilities Regulated Electric median
P/E 24.57 22.57 19.47
P/S 1.69 3.18 2.78
P/B 1.85 1.52 1.77
Price to free cash flow n/m n/m 38.27
EV/EBITDA 15.06 13.47 12.25
EV/Sales 3.51 6.08 4.74
Earnings yield 4.07% 4.43% 5.02%
Free cash flow yield (7.32%) (5.24%) (5.09%)

Profitability

Metric FE FTS Utilities Regulated Electric median
Gross margin 63.48% 45.34% 66.28%
Operating margin 14.60% 28.32% 21.79%
Net margin 6.86% 14.00% 12.94%
Free cash flow margin (12.35%) (16.64%) (11.51%)
Return on equity 7.59% 6.96% 9.75%
Return on assets 1.93% 2.29% 2.75%
Return on invested capital 3.34% 3.46% 3.87%

Growth

Metric FE FTS Utilities Regulated Electric median
Revenue growth (TTM) 12.63% 5.32% 7.43%
EPS growth (last fiscal year) 3.53% 3.09% 7.45%
Revenue growth, 5-year CAGR 6.94% 5.48% 6.75%
Net income growth, 5-year CAGR (1.12%) 6.33% 6.44%

Health

Metric FE FTS Utilities Regulated Electric median
Debt to equity 2.01 1.32 1.53
Current ratio 0.54 0.56 0.81
Net debt to EBITDA 7.04 6.17 5.25

Dividend

Metric FE FTS Utilities Regulated Electric median
Dividend yield 3.94% 3.31% 3.29%
Payout ratio 0.97 0.75 0.66

Size

Metric FE FTS Utilities Regulated Electric median
Market cap 26.36b 27.93b 23.14b

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