Reviewing Southern Union (SUG) and Chesapeake Utilities Corporation (CPK)

Southern Union (NYSE: SUG) and Chesapeake Utilities Corporation (NYSE:CPK) are both companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

60.5% of Chesapeake Utilities Corporation shares are held by institutional investors. 4.2% of Chesapeake Utilities Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Southern Union and Chesapeake Utilities Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southern Union N/A N/A N/A
Chesapeake Utilities Corporation 7.58% 9.58% 3.46%

Dividends

Chesapeake Utilities Corporation pays an annual dividend of $1.30 per share and has a dividend yield of 1.6%. Southern Union does not pay a dividend. Chesapeake Utilities Corporation pays out 48.3% of its earnings in the form of a dividend. Southern Union has raised its dividend for 13 consecutive years.

Earnings and Valuation

This table compares Southern Union and Chesapeake Utilities Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Southern Union N/A N/A N/A $2.02 N/A
Chesapeake Utilities Corporation $498.86 million 2.67 $44.67 million $2.69 30.32

Chesapeake Utilities Corporation has higher revenue and earnings than Southern Union. Southern Union 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.

Risk & Volatility

Southern Union has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Chesapeake Utilities Corporation has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Southern Union and Chesapeake Utilities Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern Union 0 0 0 0 N/A
Chesapeake Utilities Corporation 0 5 0 0 2.00

Chesapeake Utilities Corporation has a consensus price target of $73.00, suggesting a potential downside of 10.48%.

Summary

Chesapeake Utilities Corporation beats Southern Union on 8 of the 11 factors compared between the two stocks.

About Southern Union

Southern Union Company (Southern Union) is engaged in the gathering, processing, transportation, storage and distribution of natural gas in the United States. The Company owns and operates assets in the regulated and unregulated natural gas industry. Southern Union operates in three segments: Transportation and Storage, which is engaged in the interstate transportation and storage of natural gas and provides liquefied natural gas (LNG) terminalling and re-gasification services; Gathering and Processing, which is engaged in the gathering, treating, processing and redelivery of natural gas and natural gas liquid (NGL) in Texas and New Mexico, and Distribution, which is engaged in the local distribution of natural gas in Missouri. Effective December 20, 2013, Algonquin Power & Utilities Corp. (APUC) announced that, Liberty Utilities, APUC’s regulated distribution utility, acquired the Massachusetts natural gas distribution utility assets (New England Gas Assets) of Southern Union Company.

About Chesapeake Utilities Corporation

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.

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