National Fuel Gas (NYSE: NFG) and Vectren Corporation (NYSE:VVC) are both mid-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.
Analyst Recommendations
This is a breakdown of recent ratings for National Fuel Gas and Vectren Corporation, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Fuel Gas | 0 | 3 | 0 | 0 | 2.00 |
| Vectren Corporation | 0 | 0 | 3 | 0 | 3.00 |
National Fuel Gas currently has a consensus target price of $56.00, suggesting a potential downside of 2.85%. Vectren Corporation has a consensus target price of $66.00, suggesting a potential downside of 1.33%. Given Vectren Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Vectren Corporation is more favorable than National Fuel Gas.
Earnings & Valuation
This table compares National Fuel Gas and Vectren Corporation’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| National Fuel Gas | $1.59 billion | 3.10 | $804.38 million | $3.21 | 17.96 |
| Vectren Corporation | $2.59 billion | 2.14 | $668.60 million | $2.70 | 24.77 |
National Fuel Gas has higher revenue, but lower earnings than Vectren Corporation. National Fuel Gas is trading at a lower price-to-earnings ratio than Vectren Corporation, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares National Fuel Gas and Vectren Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Fuel Gas | 17.38% | 18.31% | 5.13% |
| Vectren Corporation | 8.66% | 12.65% | 3.90% |
Insider & Institutional Ownership
69.4% of National Fuel Gas shares are held by institutional investors. Comparatively, 64.5% of Vectren Corporation shares are held by institutional investors. 2.6% of National Fuel Gas shares are held by insiders. Comparatively, 0.1% of Vectren Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Dividends
National Fuel Gas pays an annual dividend of $1.66 per share and has a dividend yield of 2.9%. Vectren Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.5%. National Fuel Gas pays out 51.7% of its earnings in the form of a dividend. Vectren Corporation pays out 62.2% 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. National Fuel Gas has raised its dividend for 57 consecutive years and Vectren Corporation has raised its dividend for 46 consecutive years. National Fuel Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
National Fuel Gas has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Vectren Corporation has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.
Summary
National Fuel Gas beats Vectren Corporation on 12 of the 17 factors compared between the two stocks.
About National Fuel Gas
National Fuel Gas Company is a holding company. The Company is an energy company engaged principally in the production, gathering, transportation, distribution and marketing of natural gas. The Company operates in five business segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. The Company operates an integrated business, with assets centered in western New York and Pennsylvania, and the production and transportation of natural gas from the Marcellus Shale basin. The Company also develops and produces oil reserves, primarily in California. The Company’s Exploration and Production segment operations are carried out by Seneca Resources Corporation (Seneca), a Pennsylvania corporation. The Company’s National Fuel Gas Supply Corporation (Supply Corporation), a Pennsylvania corporation, and Empire Pipeline, Inc. (Empire), a New York corporation, carry out the Company’s Pipeline and Storage segment operations.
About Vectren Corporation
Vectren Corporation (Vectren) is an energy holding company. The Company segregates its operations into groups, including the Utility Group, the Nonutility Group, and Corporate and Other. The Company’s subsidiary, Vectren Utility Holdings, Inc. (Utility Holdings or VUHI), serves as the intermediate holding company for three public utilities: Indiana Gas Company, Inc. (Indiana Gas), Southern Indiana Gas and Electric Company (SIGECO) and Vectren Energy Delivery of Ohio, Inc. (VEDO). The Company, through Vectren Enterprises Inc. (Enterprises), is involved in non-utility activities in two primary business areas: Infrastructure Services and Energy Services. Infrastructure Services provides underground pipeline construction and repair services. Energy Services provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects.
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