Analyzing UGI Corporation (UGI) & NewJersey Resources Corporation (NJR)
UGI Corporation (NYSE: UGI) and NewJersey Resources Corporation (NYSE:NJR) are both mid-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.
Risk and Volatility
UGI Corporation has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, NewJersey Resources Corporation has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.
UGI Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. NewJersey Resources Corporation pays an annual dividend of $1.02 per share and has a dividend yield of 2.4%. UGI Corporation pays out 45.9% of its earnings in the form of a dividend. NewJersey Resources Corporation pays out 45.7% 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. UGI Corporation has raised its dividend for 31 consecutive years and NewJersey Resources Corporation has raised its dividend for 21 consecutive years. NewJersey Resources Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
77.8% of UGI Corporation shares are owned by institutional investors. Comparatively, 64.0% of NewJersey Resources Corporation shares are owned by institutional investors. 2.2% of UGI Corporation shares are owned by company insiders. Comparatively, 1.5% of NewJersey Resources Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares UGI Corporation and NewJersey Resources Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NewJersey Resources Corporation||8.81%||12.77%||4.10%|
This is a summary of recent ratings and recommmendations for UGI Corporation and NewJersey Resources Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NewJersey Resources Corporation||1||1||2||0||2.25|
UGI Corporation currently has a consensus price target of $46.00, indicating a potential downside of 6.37%. NewJersey Resources Corporation has a consensus price target of $39.75, indicating a potential downside of 8.30%. Given UGI Corporation’s higher possible upside, equities analysts plainly believe UGI Corporation is more favorable than NewJersey Resources Corporation.
Valuation & Earnings
This table compares UGI Corporation and NewJersey Resources Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|UGI Corporation||$5.98 billion||1.42||$1.35 billion||$2.18||22.54|
|NewJersey Resources Corporation||$2.20 billion||1.71||$321.77 million||$2.23||19.44|
UGI Corporation has higher revenue and earnings than NewJersey Resources Corporation. NewJersey Resources Corporation is trading at a lower price-to-earnings ratio than UGI Corporation, indicating that it is currently the more affordable of the two stocks.
NewJersey Resources Corporation beats UGI Corporation on 10 of the 17 factors compared between the two stocks.
UGI Corporation Company Profile
UGI Corporation is a holding company. The Company distributes, stores, transports and markets energy products and related services. It operates through six segments. The AmeriGas Propane segment consists of the propane distribution business of AmeriGas Partners, L.P. The UGI France segment consists of the French LPG distribution business of its subsidiaries, Antargaz, Finagaz and its liquefied petroleum gases (LPG) distribution businesses. The Flaga & Other segment consists of the LPG distribution businesses of Flaga GmbH, AvantiGas Limited and ChinaGas Partners, L.P. The Energy Services segment consists of energy-related businesses conducted by its subsidiary, UGI Energy Services, LLC (Energy Services). The Electric Generation segment consists of electric generation facilities conducted by Energy Services’ subsidiary. The Gas Utility segment consists of the regulated natural gas distribution businesses of its subsidiary, UGI Utilities, Inc.
NewJersey Resources Corporation Company Profile
New Jersey Resources Corporation is an energy services holding company. The Company’s business is the distribution of natural gas through a regulated utility, which provides other retail and wholesale energy services to customers and investing in clean energy projects and midstream assets. It operates in four business segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services and Midstream. The Natural Gas Distribution segment consists of regulated natural gas services, off-system sales, capacity and storage management operations. The Energy Services segment consists of unregulated wholesale energy operations. The Clean Energy Ventures segment consists of capital investments in clean energy projects. The Midstream segment consists of investments in the midstream natural gas market, such as natural gas transportation and storage facilities. The Home Services and Other operations consist of heating, cooling and water appliance sales and installations, among others.
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