NewJersey Resources (NYSE: NJR) and Southern Union (NYSE:SUG) are both mid-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.
Valuation and Earnings
This table compares NewJersey Resources and Southern Union’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NewJersey Resources||$2.27 billion||1.66||$132.06 million||$1.52||28.55|
This table compares NewJersey Resources and Southern Union’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and target prices for NewJersey Resources and Southern Union, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NewJersey Resources presently has a consensus price target of $41.00, indicating a potential downside of 5.53%.
Institutional & Insider Ownership
63.6% of NewJersey Resources shares are held by institutional investors. 1.5% of NewJersey Resources shares are held by company 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
NewJersey Resources has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Southern Union has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
NewJersey Resources pays an annual dividend of $1.09 per share and has a dividend yield of 2.5%. Southern Union does not pay a dividend. NewJersey Resources pays out 71.7% of its earnings in the form of a dividend. NewJersey Resources has increased its dividend for 21 consecutive years.
NewJersey Resources beats Southern Union on 9 of the 12 factors compared between the two stocks.
NewJersey Resources 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.
Southern Union Company Profile
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.
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