Reviewing Southern Company Gas (GAS) and Southwest Gas Corporation (NYSE:SWX)

Southwest Gas Corporation (NYSE: SWX) and Southern Company Gas (NYSE:GAS) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Earnings & Valuation

This table compares Southwest Gas Corporation and Southern Company Gas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Southwest Gas Corporation $2.40 billion 1.61 $568.17 million $3.24 25.05
Southern Company Gas N/A N/A N/A N/A N/A

Southwest Gas Corporation has higher revenue and earnings than Southern Company Gas.

Analyst Ratings

This is a summary of current recommendations for Southwest Gas Corporation and Southern Company Gas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwest Gas Corporation 0 3 0 0 2.00
Southern Company Gas 0 1 0 0 2.00

Southwest Gas Corporation currently has a consensus target price of $79.00, suggesting a potential downside of 2.65%. Given Southwest Gas Corporation’s higher possible upside, equities research analysts clearly believe Southwest Gas Corporation is more favorable than Southern Company Gas.

Volatility and Risk

Southwest Gas Corporation has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Southern Company Gas has a beta of -0.08, suggesting that its stock price is 108% less volatile than the S&P 500.

Institutional and Insider Ownership

78.6% of Southwest Gas Corporation shares are owned by institutional investors. 1.3% of Southwest Gas Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Southwest Gas Corporation and Southern Company Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwest Gas Corporation 6.46% 9.09% 2.73%
Southern Company Gas 15.32% 10.45% 4.40%

Dividends

Southwest Gas Corporation pays an annual dividend of $1.98 per share and has a dividend yield of 2.4%. Southern Company Gas does not pay a dividend. Southwest Gas Corporation pays out 61.1% of its earnings in the form of a dividend. Southwest Gas Corporation has raised its dividend for 5 consecutive years and Southern Company Gas has raised its dividend for 5 consecutive years.

Summary

Southwest Gas Corporation beats Southern Company Gas on 6 of the 10 factors compared between the two stocks.

About Southwest Gas Corporation

Southwest Gas Holdings, Inc., formerly Southwest Gas Corporation, is engaged in the business of purchasing, distributing and transporting natural gas. The Company operates through two segments: natural gas operations and construction services, which includes the operations of the Company’s subsidiary, Centuri Construction Group, Inc. (Centuri). The Company operates two pipeline transmission systems, such as a system, which includes a liquefied natural gas (LNG) storage facility owned by Paiute extending from the Idaho-Nevada border to the Reno, Sparks, and Carson City areas and communities in the Lake Tahoe area in both California and Nevada and other communities in northern and western Nevada, and a system extending from the Colorado River at the southern tip of Nevada to the Las Vegas distribution area.

About Southern Company Gas

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.

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