In the evolving landscape of regulated electric utilities, Pacific Gas & Electric Co. (PCG) and Eversource Energy (ES) stand out as major players with significant market presence. Both companies serve critical regional markets in the U.S. and pursue innovation in energy delivery and sustainability. Comparing their strategies and financial health offers valuable insight. Join me as we analyze these giants to identify the most compelling investment opportunity for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Pacific Gas & Electric Co. and Eversource Energy by providing an overview of these two companies and their main differences.
Pacific Gas & Electric Co. Overview
Pacific Gas & Electric Co. operates as a regulated electric utility serving northern and central California. The company generates, transmits, distributes, and sells electricity and natural gas, utilizing nuclear, hydroelectric, fossil fuel, and photovoltaic sources. It targets residential, commercial, industrial, and agricultural customers, integrating innovative solutions like personal microgrid backup power devices with its SmartMeter system.
Eversource Energy Overview
Eversource Energy is a public utility holding company engaged in energy delivery across Connecticut, Massachusetts, and New Hampshire. It operates through electric distribution, transmission, natural gas distribution, and water distribution segments. Serving diverse customer bases including residential, commercial, industrial, and municipal sectors, Eversource also manages regulated water utilities for approximately 226K customers, emphasizing a multi-utility approach.
Key similarities and differences
Both companies operate within the regulated electric utility industry and serve a broad range of customers including residential and commercial sectors. Pacific Gas & Electric focuses primarily on electricity and natural gas in California with a strong emphasis on renewable integration, while Eversource Energy offers a more diversified utility portfolio including water distribution across three states. Workforce size and market capitalization further distinguish their scale and regional influence.
Income Statement Comparison
The table below compares the key income statement metrics of Pacific Gas & Electric Co. and Eversource Energy for the fiscal year 2024.
| Metric | Pacific Gas & Electric Co. (PCG) | Eversource Energy (ES) |
|---|---|---|
| Market Cap | 34.8B | 24.99B |
| Revenue | 24.42B | 11.90B |
| EBITDA | 9.94B | 4.13B |
| EBIT | 5.36B | 2.36B |
| Net Income | 2.51B | 812M |
| EPS | 1.16 | 2.27 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Pacific Gas & Electric Co.
Pacific Gas & Electric Co. (PCG) has shown a revenue increase of 32.22% from 2020 to 2024, with net income rising by 292.64% over the same period. Margins have generally improved, with a gross margin of 37.5% and a net margin of 10.29% in 2024. The latest year saw a slight revenue decline of 0.04%, but strong growth in gross profit, EBIT, and net margin evidences operational improvement.
Eversource Energy
Eversource Energy (ES) experienced a 33.65% revenue growth from 2020 to 2024, but net income declined by 32.65% across this period. Gross margin stood at 31.12% with a net margin of 6.82% in 2024. Despite a revenue dip of 0.08% in the most recent year and a decrease in gross profit, the company achieved significant EBIT and net margin growth, indicating better profitability management amid revenue challenges.
Which one has the stronger fundamentals?
Pacific Gas & Electric Co. demonstrates stronger fundamentals, supported by consistent revenue and net income growth, alongside favorable margin expansions. Although Eversource Energy shows positive EBIT and net margin growth recently, its overall net income and margin trends are unfavorable. PCG’s higher margin stability and income growth outweigh ES’s mixed performance, reflecting a more robust income statement profile.
Financial Ratios Comparison
The table below compares key financial ratios for Pacific Gas & Electric Co. (PCG) and Eversource Energy (ES) based on their most recent fiscal year data from 2024.
| Ratios | Pacific Gas & Electric Co. (PCG) | Eversource Energy (ES) |
|---|---|---|
| ROE | 8.33% | 5.40% |
| ROIC | 3.98% | 3.18% |
| P/E | 17.20 | 25.29 |
| P/B | 1.43 | 1.37 |
| Current Ratio | 1.05 | 0.76 |
| Quick Ratio | 1.00 | 0.67 |
| D/E (Debt-to-Equity) | 1.94 | 1.94 |
| Debt-to-Assets | 43.7% | 48.9% |
| Interest Coverage | 1.46 | 2.43 |
| Asset Turnover | 0.18 | 0.20 |
| Fixed Asset Turnover | 0.28 | 0.29 |
| Payout Ratio | 3.42% | 124.32% |
| Dividend Yield | 0.20% | 4.91% |
Interpretation of the Ratios
Pacific Gas & Electric Co.
Pacific Gas & Electric Co. shows mixed financial ratios: favorable net margin (10.29%) and WACC (4.68%), but unfavorable returns on equity (8.33%) and invested capital (3.98%), with a relatively high debt-to-equity ratio (1.94). The company pays a modest dividend with a low yield of 0.2%, indicating cautious shareholder returns amid some financial weaknesses.
Eversource Energy
Eversource Energy’s ratios reveal challenges with an unfavorable return on equity (5.4%) and elevated PE ratio (25.29), alongside weak liquidity ratios (current 0.76, quick 0.67). However, it benefits from a strong dividend yield of 4.91%, supported by a stable payout. Debt levels remain a concern with a debt-to-equity ratio of 1.94.
Which one has the best ratios?
Pacific Gas & Electric Co. presents a slightly more favorable overall ratio profile compared to Eversource Energy, with better net margin, WACC, and liquidity ratios. However, both companies face significant challenges, particularly in returns and leverage, necessitating careful analysis of financial health beyond these ratios.
Strategic Positioning
This section compares the strategic positioning of Pacific Gas & Electric Co. (PCG) and Eversource Energy (ES), including Market position, Key segments, and Exposure to technological disruption:
Pacific Gas & Electric Co. (PCG)
- Large market cap of 34.8B; operates in regulated electric sector in California facing moderate competitive pressure.
- Revenue driven mainly by electricity (18.6B) and natural gas (6.6B); serves residential, commercial, industrial, and agricultural customers.
- Developing microgrid backup power integrated with SmartMeter; exposure to tech disruption focused on smart grid innovations.
Eversource Energy (ES)
- Market cap of 25.0B; serves regulated electric and gas markets in New England with moderate competition.
- Diversified segments including electric distribution (9.1B), transmission (2.1B), natural gas (2.1B), and water services.
- Engages in solar power facilities and regulated water utilities; technological disruption relates to renewable integration.
Pacific Gas & Electric Co. vs Eversource Energy Positioning
PCG shows a concentrated focus on electricity and natural gas in California with innovation in smart grid tech, while ES pursues a more diversified utility portfolio across electric, gas, and water segments in New England, reflecting broader business drivers and regional coverage.
Which has the best competitive advantage?
Both companies are shedding value with ROIC below WACC, but PCG has a slightly unfavorable moat with growing profitability, whereas ES faces a very unfavorable moat with declining returns, indicating PCG currently holds a relatively stronger competitive advantage.
Stock Comparison
The stock price movements over the past 12 months reveal contrasting dynamics between Pacific Gas & Electric Co. and Eversource Energy, with notable shifts in market sentiment and volume trends shaping their respective performances.
Trend Analysis
Pacific Gas & Electric Co. (PCG) experienced a bearish trend over the past 12 months with a -3.53% price change, showing a deceleration in decline and moderate volatility at a 1.93 standard deviation.
Eversource Energy (ES) showed a bullish trend with a 15.15% gain over the same period, though recent months indicate a deceleration and a downturn with a -9.21% price change, accompanied by higher volatility at 4.5 standard deviation.
Comparing both, Eversource Energy delivered the highest market performance over the past year, outperforming Pacific Gas & Electric Co. despite recent downward pressure.
Target Prices
The current analyst consensus indicates moderate upside potential for both Pacific Gas & Electric Co. and Eversource Energy.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Pacific Gas & Electric Co. | 25 | 18 | 21.5 |
| Eversource Energy | 81 | 60 | 68 |
Analysts expect Pacific Gas & Electric Co.’s price to rise above its current $15.85, while Eversource Energy’s consensus target slightly exceeds its current $67.79, suggesting cautious optimism.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Pacific Gas & Electric Co. (PCG) and Eversource Energy (ES):
Rating Comparison
PCG Rating
- Rating: B-, considered very favorable by analysts.
- Discounted Cash Flow Score: 1, indicating a very unfavorable valuation forecast.
- ROE Score: 3, reflecting a moderate efficiency in generating profit from equity.
- ROA Score: 3, showing moderate effectiveness in asset utilization.
- Debt To Equity Score: 1, indicating very unfavorable financial risk profile.
- Overall Score: 3, rated as moderate overall financial standing.
ES Rating
- Rating: C+, also regarded as very favorable by analysts.
- Discounted Cash Flow Score: 1, also very unfavorable for valuation.
- ROE Score: 3, similarly moderate in profit generation efficiency.
- ROA Score: 3, equal moderate score in asset utilization.
- Debt To Equity Score: 1, also very unfavorable, implying higher financial risk.
- Overall Score: 2, a moderate but lower overall score compared to PCG.
Which one is the best rated?
Based strictly on the provided data, PCG is better rated overall with a B- rating and a higher overall score of 3, compared to ES’s C+ rating and overall score of 2. Both have similar weaknesses in discounted cash flow and debt to equity scores.
Scores Comparison
Here is a comparison of the financial health scores for Pacific Gas & Electric Co. and Eversource Energy:
PCG Scores
- Altman Z-Score: 0.48, in the distress zone indicating high bankruptcy risk.
- Piotroski Score: 5, representing average financial strength.
ES Scores
- Altman Z-Score: 0.75, also in the distress zone with high bankruptcy risk.
- Piotroski Score: 6, indicating average financial strength, slightly better than PCG.
Which company has the best scores?
Both companies are in the distress zone for the Altman Z-Score, signaling significant financial risk. ES has a slightly higher Piotroski Score of 6 compared to PCG’s 5, indicating marginally stronger financial health based on these metrics.
Grades Comparison
The following is a comparison of recent grades assigned to Pacific Gas & Electric Co. and Eversource Energy by reputable grading companies:
Pacific Gas & Electric Co. Grades
The table below shows recent analyst grades for Pacific Gas & Electric Co. from major financial institutions.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | Maintain | Overweight | 2025-12-12 |
| UBS | Maintain | Neutral | 2025-10-24 |
| Jefferies | Maintain | Buy | 2025-10-22 |
| BMO Capital | Maintain | Outperform | 2025-10-14 |
| Jefferies | Maintain | Buy | 2025-10-03 |
| Barclays | Maintain | Overweight | 2025-10-01 |
| Morgan Stanley | Maintain | Equal Weight | 2025-09-25 |
| Morgan Stanley | Upgrade | Equal Weight | 2025-09-18 |
| UBS | Maintain | Neutral | 2025-09-18 |
| Barclays | Maintain | Overweight | 2025-07-22 |
Pacific Gas & Electric Co. exhibits predominantly positive grades, with consistent “Buy,” “Outperform,” and “Overweight” ratings from multiple firms, indicating a generally favorable outlook.
Eversource Energy Grades
Below is a summary of recent analyst grades for Eversource Energy by recognized financial institutions.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Neutral | 2025-12-17 |
| JP Morgan | Maintain | Underweight | 2025-12-12 |
| Janney Montgomery Scott | Upgrade | Buy | 2025-11-24 |
| Scotiabank | Maintain | Sector Underperform | 2025-11-20 |
| Mizuho | Downgrade | Neutral | 2025-11-20 |
| Wells Fargo | Downgrade | Equal Weight | 2025-11-20 |
| UBS | Downgrade | Neutral | 2025-11-06 |
| BMO Capital | Maintain | Market Perform | 2025-11-06 |
| Scotiabank | Maintain | Sector Underperform | 2025-11-06 |
| Mizuho | Maintain | Outperform | 2025-10-27 |
Eversource Energy’s grades show a mixed pattern with several downgrades and a notable number of “Neutral” and “Sector Underperform” ratings, reflecting a more cautious analyst stance.
Which company has the best grades?
Pacific Gas & Electric Co. has received generally stronger and more positive grades than Eversource Energy, which features more neutral and underperform ratings. This difference suggests that investors may perceive Pacific Gas & Electric Co. as having a more favorable growth or risk profile compared to Eversource Energy.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses between Pacific Gas & Electric Co. (PCG) and Eversource Energy (ES) based on their recent financial and operational data.
| Criterion | Pacific Gas & Electric Co. (PCG) | Eversource Energy (ES) |
|---|---|---|
| Diversification | Moderate: Primarily electricity and natural gas segments with steady revenue growth in electricity (18.6B in 2024) | Higher: Electric distribution, transmission, natural gas, water, and other services with diversified revenue streams (approx. 13.5B total in 2024) |
| Profitability | Moderate profitability: Net margin 10.29%, ROIC 3.98% (slightly unfavorable), growing ROIC trend but overall value destruction | Lower profitability: Net margin 6.82%, ROIC 3.18% (unfavorable), declining ROIC trend, value destruction with decreasing profitability |
| Innovation | Limited visible innovation focus, traditional utility model with incremental improvements | Similar traditional utility focus; innovation efforts not prominent in current data |
| Global presence | Primarily focused on US regulated markets, mainly California | Regional US presence in Northeast with multi-utility operations |
| Market Share | Large market share in California electricity and gas markets | Significant regional market share in electric and gas distribution in Northeast US |
Key takeaways: PCG shows a slightly unfavorable moat but with improving profitability and steady revenue growth in electricity. ES is more diversified but faces declining profitability and a very unfavorable moat status. Both companies have challenges in innovation and financial efficiency, requiring cautious risk management for investors.
Risk Analysis
Below is a comparative table of key risks for Pacific Gas & Electric Co. (PCG) and Eversource Energy (ES) based on the most recent data from 2024-2026.
| Metric | Pacific Gas & Electric Co. (PCG) | Eversource Energy (ES) |
|---|---|---|
| Market Risk | Low beta (0.38) implies lower volatility but exposure to energy price shifts and regulation | Moderate beta (0.77), somewhat more sensitive to market swings |
| Debt level | High debt-to-equity (1.94), interest coverage low (1.76) — financial risk present | Similar high debt-to-equity (1.94), better interest coverage (2.12) but still notable leverage |
| Regulatory Risk | High, due to California’s strict utility regulations and wildfire liabilities | Moderate, operates in Northeast states with regulated frameworks but less wildfire risk |
| Operational Risk | Elevated, given infrastructure aging and prior wildfire-related outages | Moderate, diversified energy delivery but infrastructure challenges persist |
| Environmental Risk | Significant, linked to wildfire liabilities and transition to clean energy | Moderate, focus on renewable integration but less exposure to wildfire risk |
| Geopolitical Risk | Low, primarily US domestic operations | Low, US regional utility with stable political environment |
Synthesis: Both companies face significant financial leverage risks with high debt levels and moderate interest coverage, increasing vulnerability to interest rate rises. PCG’s wildfire liabilities and regulatory scrutiny make its environmental and operational risks more impactful, while ES benefits from a more stable regulatory environment but faces moderate operational challenges. Investors should weigh PCG’s higher risk profile against potential returns and consider ES for a steadier risk exposure.
Which Stock to Choose?
Pacific Gas & Electric Co. (PCG) shows a slightly unfavorable financial ratios profile despite favorable income statement trends, including strong gross and net margin growth. Its profitability is improving, but debt levels and interest coverage remain concerns, reflected in a very favorable B- rating yet distress zone Altman Z-Score.
Eversource Energy (ES) presents an overall unfavorable ratios evaluation with moderate income statement favorability, supported by a very favorable C+ rating. However, the company is shedding value with a declining ROIC trend and also scores in the distress zone for bankruptcy risk, indicating caution on financial stability.
Investors with a risk-tolerant profile focused on growth might view PCG’s improving profitability and positive income trends as potentially attractive, while risk-averse investors prioritizing financial stability and dividend yield could lean toward ES, despite its unfavorable moat and ratio evaluations, due to its steadier market capitalization and dividend status.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Pacific Gas & Electric Co. and Eversource Energy to enhance your investment decisions:
