Analyzing RGC Resources (NASDAQ:RGCO) & PBF Energy (NYSE:PBF)

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

Dividends

RGC Resources pays an annual dividend of $0.83 per share and has a dividend yield of 3.9%. PBF Energy pays an annual dividend of $1.10 per share and has a dividend yield of 3.8%. RGC Resources pays out 63.4% of its earnings in the form of a dividend. PBF Energy pays out -12.8% 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 and PBF Energy has raised its dividend for 2 consecutive years. RGC Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

35.8% of RGC Resources shares are held by institutional investors. Comparatively, 96.3% of PBF Energy shares are held by institutional investors. 6.6% of RGC Resources shares are held by insiders. Comparatively, 5.3% of PBF Energy shares are held 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.

Risk & Volatility

RGC Resources has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, PBF Energy has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for RGC Resources and PBF Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RGC Resources	0	0	1	0	3.00
PBF Energy	8	5	1	0	1.50

PBF Energy has a consensus price target of $26.17, indicating a potential downside of 9.05%. Given PBF Energy’s higher possible upside, analysts clearly believe PBF Energy is more favorable than RGC Resources.

Profitability

This table compares RGC Resources and PBF Energy’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%
PBF Energy	-3.24%	-17.46%	-7.46%

Valuation and Earnings

This table compares RGC Resources and PBF Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RGC Resources	$84.64 million	2.62	$11.76 million	$1.31	16.37
PBF Energy	$30.28 billion	0.11	-$533.80 million	($8.59)	-3.35

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

Summary

RGC Resources beats PBF Energy on 11 of the 16 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 PBF Energy

PBF Energy Inc., through its subsidiaries, engages in refining and supplying petroleum products. The company operates in two segments, Refining and Logistics. It produces gasoline, ultra-low-sulfur diesel, heating oil, diesel fuel, jet fuel, lubricants, petrochemicals, and asphalt, as well as unbranded transportation fuels, petrochemical feedstocks, blending components, and other petroleum products from crude oil. The company sells its products in Northeast, Midwest, Gulf Coast, and West Coast of the United States, as well as in other regions of the United States, Canada, Mexico, and internationally. It is also involved in the provision of various rail, truck, and marine terminaling services, as well as pipeline transportation and storage services. The company was founded in 2008 and is based in Parsippany, New Jersey.