National Fuel Gas (NYSE:NFG) & SandRidge Energy (NYSE:SD) Financial Review

SandRidge Energy (NYSE:SD) and National Fuel Gas (NYSE:NFG) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Volatility and Risk

SandRidge Energy has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, National Fuel Gas has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.

Earnings & Valuation

This table compares SandRidge Energy and National Fuel Gas”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SandRidge Energy	$125.29 million	3.55	$62.99 million	$2.04	5.94
National Fuel Gas	$1.94 billion	4.04	$77.51 million	$2.66	32.71

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

Dividends

SandRidge Energy pays an annual dividend of $0.44 per share and has a dividend yield of 3.6%. National Fuel Gas pays an annual dividend of $2.14 per share and has a dividend yield of 2.5%. SandRidge Energy pays out 21.6% of its earnings in the form of a dividend. National Fuel Gas pays out 80.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SandRidge Energy has increased its dividend for 2 consecutive years and National Fuel Gas has increased its dividend for 55 consecutive years. SandRidge Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and price targets for SandRidge Energy and National Fuel Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SandRidge Energy	0	0	0	0	0.00
National Fuel Gas	0	2	2	1	2.80

National Fuel Gas has a consensus price target of $96.67, indicating a potential upside of 11.11%. Given National Fuel Gas’ stronger consensus rating and higher possible upside, analysts clearly believe National Fuel Gas is more favorable than SandRidge Energy.

Institutional & Insider Ownership

61.8% of SandRidge Energy shares are held by institutional investors. Comparatively, 74.0% of National Fuel Gas shares are held by institutional investors. 1.5% of SandRidge Energy shares are held by company insiders. Comparatively, 1.4% of National Fuel Gas shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares SandRidge Energy and National Fuel Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SandRidge Energy	51.77%	10.05%	7.96%
National Fuel Gas	11.15%	20.81%	7.03%

Summary

National Fuel Gas beats SandRidge Energy on 12 of the 18 factors compared between the two stocks.

About SandRidge Energy

SandRidge Energy, Inc. engages in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the United States Mid-Continent. The company was incorporated in 2006 and is headquartered in Oklahoma City, Oklahoma.

About National Fuel Gas

National Fuel Gas Company operates as a diversified energy company. It operates through four segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. The Exploration and Production segment explores for, develops, and produces natural gas and oil. The Pipeline and Storage segment provides interstate natural gas transportation services through an integrated gas pipeline system in Pennsylvania and New York; and owns and operates underground natural gas storage fields. This segment also transports natural gas for National Fuel Gas Distribution Corporation, as well as for other utilities, industrial companies, and power producers in New York State. The Gathering segment builds, owns, and operates natural gas processing and pipeline gathering facilities in the Appalachian region, as well as provides gathering services to Seneca. The Utility segment sells natural gas or provides natural gas utility services to various customers in Buffalo, Niagara Falls, and Jamestown, New York; and Erie and Sharon, Pennsylvania. National Fuel Gas Company was incorporated in 1902 and is headquartered in Williamsville, New York.