Southern Company Gas (NYSE: GAS) and NewJersey Resources Corporation (NYSE:NJR) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.
Dividends
NewJersey Resources Corporation pays an annual dividend of $1.02 per share and has a dividend yield of 2.3%. Southern Company Gas does not pay a dividend. NewJersey Resources Corporation pays out 45.7% of its earnings in the form of a dividend. Southern Company Gas has raised its dividend for 5 consecutive years and NewJersey Resources Corporation has raised its dividend for 21 consecutive years.
Valuation & Earnings
This table compares Southern Company Gas and NewJersey Resources Corporation’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Southern Company Gas | N/A | N/A | N/A | N/A | N/A |
| NewJersey Resources Corporation | $2.20 billion | 1.72 | $321.77 million | $2.23 | 19.55 |
NewJersey Resources Corporation has higher revenue and earnings than Southern Company Gas.
Profitability
This table compares Southern Company Gas and NewJersey Resources Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Southern Company Gas | 15.32% | 10.45% | 4.40% |
| NewJersey Resources Corporation | 8.81% | 12.77% | 4.10% |
Analyst Ratings
This is a summary of recent ratings and recommmendations for Southern Company Gas and NewJersey Resources Corporation, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Southern Company Gas | 0 | 1 | 0 | 0 | 2.00 |
| NewJersey Resources Corporation | 1 | 1 | 2 | 0 | 2.25 |
NewJersey Resources Corporation has a consensus price target of $37.25, suggesting a potential downside of 14.56%. Given NewJersey Resources Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe NewJersey Resources Corporation is more favorable than Southern Company Gas.
Volatility & Risk
Southern Company Gas has a beta of -0.08, suggesting that its share price is 108% less volatile than the S&P 500. Comparatively, NewJersey Resources Corporation has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.
Insider & Institutional Ownership
65.0% of NewJersey Resources Corporation shares are held by institutional investors. 1.5% of NewJersey Resources Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
NewJersey Resources Corporation beats Southern Company Gas on 10 of the 13 factors compared between the two stocks.
Southern Company Gas Company Profile
Southern Company Gas, formerly AGL Resources Inc, is a natural gas-only distribution company. The Company operates in four operating segments: distribution operations, retail operations, wholesale services and midstream operations. The Company’s distribution operations segment is engaged in providing natural gas to residential, commercial and industrial customers. The retail operations segment is involved in the provision of natural gas commodity and related services. The wholesale services segment is engaged in natural gas storage, gas pipeline arbitrage and provides natural gas asset management and related logistics services for its utilities, as well as for non-affiliated companies. Midstream operations segment consists primarily of natural gas storage facilities and select pipelines, enabling the provision of diverse sources of natural gas supplies to its customers.
NewJersey Resources Corporation Company Profile
New Jersey Resources Corporation is an energy services holding company. The Company’s business is the distribution of natural gas through a regulated utility, which provides other retail and wholesale energy services to customers and investing in clean energy projects and midstream assets. It operates in four business segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services and Midstream. The Natural Gas Distribution segment consists of regulated natural gas services, off-system sales, capacity and storage management operations. The Energy Services segment consists of unregulated wholesale energy operations. The Clean Energy Ventures segment consists of capital investments in clean energy projects. The Midstream segment consists of investments in the midstream natural gas market, such as natural gas transportation and storage facilities. The Home Services and Other operations consist of heating, cooling and water appliance sales and installations, among others.
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