Head-To-Head Comparison: Northwest Natural Gas (NYSE:NWN) versus UGI (NYSE:UGI)

UGI (NYSE:UGI) and Northwest Natural Gas (NYSE:NWN) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Dividends

UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.3%. Northwest Natural Gas pays an annual dividend of $1.96 per share and has a dividend yield of 4.7%. 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. Northwest Natural Gas pays out 77.5% 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 raised its dividend for 37 consecutive years and Northwest Natural Gas has raised its dividend for 70 consecutive years. Northwest Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares UGI and Northwest Natural Gas”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UGI	$7.21 billion	1.03	$269.00 million	$1.90	18.22
Northwest Natural Gas	$1.15 billion	1.45	$78.87 million	$2.53	16.40

UGI has higher revenue and earnings than Northwest Natural Gas. Northwest Natural Gas is trading at a lower price-to-earnings ratio than UGI, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

UGI has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Northwest Natural Gas has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for UGI and Northwest Natural Gas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UGI	0	2	2	0	2.50
Northwest Natural Gas	0	2	1	0	2.33

UGI currently has a consensus target price of $31.33, indicating a potential downside of 9.49%. Northwest Natural Gas has a consensus target price of $48.00, indicating a potential upside of 15.66%. Given Northwest Natural Gas’ higher probable upside, analysts plainly believe Northwest Natural Gas is more favorable than UGI.

Profitability

This table compares UGI and Northwest Natural Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UGI	5.70%	15.73%	4.81%
Northwest Natural Gas	8.34%	8.60%	2.25%

Insider and Institutional Ownership

82.3% of UGI shares are held by institutional investors. Comparatively, 75.1% of Northwest Natural Gas shares are held by institutional investors. 0.7% of UGI shares are held by company insiders. Comparatively, 0.8% of Northwest Natural Gas shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

UGI beats Northwest Natural Gas on 9 of the 17 factors compared between the two stocks.

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.

About Northwest Natural Gas

Northwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, and industrial customers in the United States. The company operates a mist gas storage facility contracted to other utilities, third-party marketers, and electric generators; offers natural gas asset management services; and operates an appliance retail center. It also engages in gas storage, water and wastewater, non-regulated renewable natural gas, and other investment businesses. In addition, the company provides natural gas service in Oregon and southwest Washington; and water and wastewater connections. Northwest Natural Holding Company was founded in 1859 and is headquartered in Portland, Oregon.