Critical Comparison: National Fuel Gas (NFG) & Questar (STR)
National Fuel Gas (NYSE: NFG) and Questar (NYSE:STR) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.
Insider and Institutional Ownership
69.4% of National Fuel Gas shares are owned by institutional investors. Comparatively, 78.9% of Questar shares are owned by institutional investors. 2.6% of National Fuel Gas shares are owned by insiders. Comparatively, 0.4% of Questar shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares National Fuel Gas and Questar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|National Fuel Gas||17.38%||18.31%||5.13%|
This is a summary of current ratings for National Fuel Gas and Questar, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Fuel Gas||0||3||0||0||2.00|
National Fuel Gas presently has a consensus target price of $55.00, suggesting a potential downside of 7.17%. Questar has a consensus target price of $25.00, suggesting a potential downside of 0.24%. Given Questar’s higher possible upside, analysts clearly believe Questar is more favorable than National Fuel Gas.
Volatility and Risk
National Fuel Gas has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Questar has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.
National Fuel Gas pays an annual dividend of $1.66 per share and has a dividend yield of 2.8%. Questar pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. National Fuel Gas pays out 51.7% of its earnings in the form of a dividend. Questar pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Fuel Gas has increased its dividend for 46 consecutive years and Questar has increased its dividend for 37 consecutive years.
Valuation & Earnings
This table compares National Fuel Gas and Questar’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|National Fuel Gas||$1.59 billion||3.19||$804.38 million||$3.21||18.46|
National Fuel Gas has higher revenue and earnings than Questar. National Fuel Gas is trading at a lower price-to-earnings ratio than Questar, indicating that it is currently the more affordable of the two stocks.
National Fuel Gas beats Questar on 8 of the 12 factors compared between the two stocks.
National Fuel Gas Company Profile
National Fuel Gas Company is a holding company. The Company is an energy company engaged principally in the production, gathering, transportation, distribution and marketing of natural gas. The Company operates in five business segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. The Company operates an integrated business, with assets centered in western New York and Pennsylvania, and the production and transportation of natural gas from the Marcellus Shale basin. The Company also develops and produces oil reserves, primarily in California. The Company’s Exploration and Production segment operations are carried out by Seneca Resources Corporation (Seneca), a Pennsylvania corporation. The Company’s National Fuel Gas Supply Corporation (Supply Corporation), a Pennsylvania corporation, and Empire Pipeline, Inc. (Empire), a New York corporation, carry out the Company’s Pipeline and Storage segment operations.
Questar Company Profile
Dominion Questar Corp, formerly Questar Corporation, is an integrated natural gas holding company. The Company, through its subsidiaries is principally engaged in three lines of business, which include Questar Gas Company (Questar Gas), which provides retail natural gas distribution in Utah, Wyoming and Idaho; Wexpro Company (Wexpro), which develops and produces natural gas from cost-of-service reserves for Questar Gas customers, and Questar Pipeline Company, which operates interstate natural gas pipelines and storage facilities in the western the United States and provides other energy services. The Company is also engaged in Corporate and Other operations, which include Questar Fueling Company (Questar Fueling) that builds, owns and operates compressed natural gas (CNG) fueling stations for fleet operators with medium- and heavy-duty trucks and tractors. Questar Gas distributes gas to customers along the Wasatch Front, Provo, Salt Lake, Ogden and other areas in Utah.
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