Financial Review: Chesapeake Utilities Corporation (CPK) & Just Energy Group (JE)

Chesapeake Utilities Corporation (NYSE: CPK) and Just Energy Group (NYSE:JE) are both small-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, analyst recommendations, valuation, risk and dividends.

Profitability

This table compares Chesapeake Utilities Corporation and Just Energy Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Utilities Corporation	7.40%	9.18%	3.41%
Just Energy Group	12.37%	-84.39%	15.43%

Dividends

Chesapeake Utilities Corporation pays an annual dividend of $1.30 per share and has a dividend yield of 1.6%. Just Energy Group pays an annual dividend of $0.37 per share and has a dividend yield of 7.2%. Chesapeake Utilities Corporation pays out 50.8% of its earnings in the form of a dividend. Just Energy Group pays out 23.6% 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. Chesapeake Utilities Corporation has increased its dividend for 13 consecutive years. Just Energy Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Chesapeake Utilities Corporation and Just Energy Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Utilities Corporation	0	4	1	0	2.20
Just Energy Group	0	2	3	0	2.60

Chesapeake Utilities Corporation presently has a consensus price target of $69.50, suggesting a potential downside of 11.80%. Just Energy Group has a consensus price target of $8.80, suggesting a potential upside of 70.21%. Given Just Energy Group’s stronger consensus rating and higher probable upside, analysts clearly believe Just Energy Group is more favorable than Chesapeake Utilities Corporation.

Insider & Institutional Ownership

60.0% of Chesapeake Utilities Corporation shares are owned by institutional investors. Comparatively, 29.4% of Just Energy Group shares are owned by institutional investors. 5.4% of Chesapeake Utilities Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Chesapeake Utilities Corporation has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, Just Energy Group has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Valuation and Earnings

This table compares Chesapeake Utilities Corporation and Just Energy Group’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Chesapeake Utilities Corporation	$537.72 million	2.39	$123.36 million	$2.56	30.78
Just Energy Group	$2.98 billion	0.26	$185.59 million	$1.57	3.29

Just Energy Group has higher revenue and earnings than Chesapeake Utilities Corporation. Just Energy Group is trading at a lower price-to-earnings ratio than Chesapeake Utilities Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Just Energy Group beats Chesapeake Utilities Corporation on 10 of the 17 factors compared between the two stocks.

Chesapeake Utilities Corporation Company Profile

Chesapeake Utilities Corporation (Chesapeake) is an energy company. The Company operates through two segments: Regulated Energy and Unregulated Energy. The Company provides natural gas distribution and transmission; natural gas supply, gathering, processing and marketing; electric distribution and generation; propane distribution; propane and crude oil wholesale marketing; steam generation, and other energy-related services. The Regulated Energy segment includes the Company’s natural gas distribution, natural gas transmission and electric distribution operations. The Unregulated Energy segment includes its propane distribution, propane and crude oil wholesale marketing, natural gas marketing and unregulated natural gas supply, gathering and processing, electricity and steam generation and other unregulated energy-related services to customers.

Just Energy Group Company Profile

Just Energy Group Inc. (Just Energy) is an energy management solutions provider engaged in electricity, natural gas, solar and green energy. The Company’s segments include Consumer Energy and Commercial Energy. The Company operates in the United States, Canada and the United Kingdom, offering a range of energy products, including long-term fixed-price, variable rate and flat bill programs; home energy management services, including smart thermostats and tools to manage energy use at the appliance level, and residential solar panel installations. It markets under the brands, such as Just Energy, Hudson Energy, Amigo Energy, GreenStar Energy, Just Solar, Tara Energy and TerraPass. Just Energy’s commercial business is operated primarily through Hudson Energy. Hudson Energy offers fixed and variable rate natural gas and electricity contracts, as well as customized products. Just Energy also offers green products through its JustGreen Electricity and Natural Gas and TerraPass programs.