Critical Comparison: RGC Resources (NASDAQ:RGCO) versus Equinor ASA (NYSE:EQNR)

RGC Resources (NASDAQ:RGCO) and Equinor ASA (NYSE:EQNR) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Profitability

This table compares RGC Resources and Equinor ASA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RGC Resources	14.48%	12.01%	4.17%
Equinor ASA	7.60%	16.91%	5.43%

Dividends

RGC Resources pays an annual dividend of $0.83 per share and has a dividend yield of 3.7%. Equinor ASA pays an annual dividend of $1.22 per share and has a dividend yield of 5.1%. RGC Resources pays out 63.4% of its earnings in the form of a dividend. Equinor ASA pays out 40.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. RGC Resources has raised its dividend for 22 consecutive years. Equinor ASA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

35.8% of RGC Resources shares are owned by institutional investors. Comparatively, 5.5% of Equinor ASA shares are owned by institutional investors. 6.6% of RGC Resources shares are owned by company insiders. Comparatively, 0.0% of Equinor ASA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for RGC Resources and Equinor ASA, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RGC Resources	0	0	0	0	0.00
Equinor ASA	7	5	4	0	1.81

Equinor ASA has a consensus target price of $22.71, indicating a potential downside of 5.95%. Given Equinor ASA’s stronger consensus rating and higher probable upside, analysts plainly believe Equinor ASA is more favorable than RGC Resources.

Earnings & Valuation

This table compares RGC Resources and Equinor ASA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RGC Resources	$84.64 million	2.77	$11.76 million	$1.31	17.33
Equinor ASA	$103.77 billion	0.69	$8.81 billion	$3.01	8.02

Equinor ASA has higher revenue and earnings than RGC Resources. Equinor ASA is trading at a lower price-to-earnings ratio than RGC Resources, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

RGC Resources has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Equinor ASA has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Summary

Equinor ASA beats RGC Resources on 11 of the 17 factors compared between the two stocks.

About RGC Resources

RGC Resources, Inc., through its subsidiaries, operates as an energy services company. It sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. The company also provides various unregulated services. It operates approximately 1,179 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility, as well as owns and operates six metering stations. In addition, it produces biogas. RGC Resources, Inc. was founded in 1883 and is based in Roanoke, Virginia.

About Equinor ASA

Equinor ASA, an energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and other forms of energy in Norway and internationally. It operates through Exploration & Production Norway; Exploration & Production International; Exploration & Production USA; Marketing, Midstream & Processing; Renewables; and Other segments. The company also transports, processes, manufactures, markets, and trades in oil and gas commodities, such as crude and condensate products, gas liquids, natural gas, and liquefied natural gas; trades in power and emissions; operates refineries, terminals and processing, and power plants; and develops low carbon solutions for oil and gas. In addition, it develops carbon capture and storage projects; provides transportation solutions, including pipelines, shipping, trucking, and rail; and develops and explores for renewable energy, such as offshore wind, green hydrogen, and solar power. The company was formerly known as Statoil ASA and changed its name to Equinor ASA in May 2018. Equinor ASA was incorporated in 1972 and is headquartered in Stavanger, Norway.