Southwest Gas Corporation (NYSE: SWX) and Southern Union (NYSE:SUG) are both mid-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Dividends

Southwest Gas Corporation pays an annual dividend of $1.98 per share and has a dividend yield of 2.4%. Southern Union does not pay a dividend. Southwest Gas Corporation pays out 58.2% of its earnings in the form of a dividend. Southern Union has increased its dividend for 5 consecutive years.

Volatility and Risk

Southwest Gas Corporation has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Southern Union has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Earnings and Valuation

This table compares Southwest Gas Corporation and Southern Union’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Southwest Gas Corporation $2.46 billion 1.60 $152.04 million $3.40 24.32
Southern Union N/A N/A N/A $2.02 N/A

Southwest Gas Corporation has higher revenue and earnings than Southern Union. Southern Union is trading at a lower price-to-earnings ratio than Southwest Gas Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

75.7% of Southwest Gas Corporation shares are held by institutional investors. 1.0% of Southwest Gas Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Southwest Gas Corporation and Southern Union’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwest Gas Corporation 6.64% 9.56% 2.87%
Southern Union N/A N/A N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Southwest Gas Corporation and Southern Union, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwest Gas Corporation 0 3 0 0 2.00
Southern Union 0 0 0 0 N/A

Southwest Gas Corporation currently has a consensus target price of $79.00, indicating a potential downside of 4.46%.

Summary

Southwest Gas Corporation beats Southern Union on 8 of the 11 factors compared between the two stocks.

About Southwest Gas Corporation

Southwest Gas Holdings, Inc., formerly Southwest Gas Corporation, is engaged in the business of purchasing, distributing and transporting natural gas. The Company operates through two segments: natural gas operations and construction services, which includes the operations of the Company’s subsidiary, Centuri Construction Group, Inc. (Centuri). The Company operates two pipeline transmission systems, such as a system, which includes a liquefied natural gas (LNG) storage facility owned by Paiute extending from the Idaho-Nevada border to the Reno, Sparks, and Carson City areas and communities in the Lake Tahoe area in both California and Nevada and other communities in northern and western Nevada, and a system extending from the Colorado River at the southern tip of Nevada to the Las Vegas distribution area.

About Southern Union

Southern Union Company (Southern Union) is engaged in the gathering, processing, transportation, storage and distribution of natural gas in the United States. The Company owns and operates assets in the regulated and unregulated natural gas industry. Southern Union operates in three segments: Transportation and Storage, which is engaged in the interstate transportation and storage of natural gas and provides liquefied natural gas (LNG) terminalling and re-gasification services; Gathering and Processing, which is engaged in the gathering, treating, processing and redelivery of natural gas and natural gas liquid (NGL) in Texas and New Mexico, and Distribution, which is engaged in the local distribution of natural gas in Missouri. Effective December 20, 2013, Algonquin Power & Utilities Corp. (APUC) announced that, Liberty Utilities, APUC’s regulated distribution utility, acquired the Massachusetts natural gas distribution utility assets (New England Gas Assets) of Southern Union Company.

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