Critical Analysis: Enagas (OTCMKTS:ENGGY) and UGI (NYSE:UGI)

Enagas (OTCMKTS:ENGGY) and UGI (NYSE:UGI) are both mid-cap utilities companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Earnings and Valuation

This table compares Enagas and UGI”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enagas	$979.99 million	4.21	-$323.88 million	N/A	N/A
UGI	$7.21 billion	1.05	$269.00 million	$1.90	18.58

UGI has higher revenue and earnings than Enagas.

Volatility & Risk

Enagas has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, UGI has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Dividends

Enagas pays an annual dividend of $0.49 per share and has a dividend yield of 6.2%. UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.2%. UGI pays out 78.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UGI has increased its dividend for 37 consecutive years.

Insider and Institutional Ownership

82.3% of UGI shares are owned by institutional investors. 0.2% of Enagas shares are owned by insiders. Comparatively, 0.7% of UGI shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Enagas and UGI, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enagas	0	0	0	0	0.00
UGI	0	2	2	0	2.50

UGI has a consensus target price of $31.3333, indicating a potential downside of 11.25%. Given UGI’s stronger consensus rating and higher probable upside, analysts plainly believe UGI is more favorable than Enagas.

Profitability

This table compares Enagas and UGI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enagas	N/A	N/A	N/A
UGI	5.70%	15.73%	4.81%

Summary

UGI beats Enagas on 12 of the 15 factors compared between the two stocks.

About Enagas

Enagás, S.A. engages in the development, operation, and maintenance of gas infrastructures in Spain and internationally. The company provides gas transportation services through gas pipelines; natural gas regasification services; and operates underground storage facilities. It is involved in the operation and technical management of the basic network and secondary transportation network for natural gas. The company operates approximately 12,000 kilometers of gas pipelines, 19 compressor stations and 416 regulation and metering stations. Enagás, S.A. was founded in 1972 and is based in Madrid, Spain.

About UGI

UGI Corporation, together with its subsidiaries, distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.3 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,400 propane distribution locations. The company distributes liquefied petroleum gases (LPG) to residential, commercial, industrial, agricultural, wholesale and automobile fuel customers; and provides logistics, storage, and other services to third-party LPG distributors. In addition, it engages in the retail sale of natural gas, liquid fuels, and electricity to approximately 12,400 residential, commercial, and industrial customers at 42,000 locations. Further, the company distributes natural gas to approximately 677,000 customers in eastern and central Pennsylvania counties through its distribution system of approximately 12,500 miles of gas mains; and supplies electricity to approximately 62,600 customers in northeastern Pennsylvania through 2,560 miles of lines and 14 substations. Additionally, it operates electric generation facilities, which include coal-fired, landfill gas-fueled, solar-powered, and natural gas-fueled facilities; a natural gas liquefaction, storage, and vaporization facility; propane storage and propane-air mixing stations; and rail transshipment terminals. It manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities. UGI Corporation was incorporated in 1882 and is headquartered in King of Prussia, Pennsylvania.