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

Profitability

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

Net Margins Return on Equity Return on Assets
Southern Union N/A N/A N/A
UGI 7.13% 10.65% 3.57%

Valuation and Earnings

This table compares Southern Union and UGI’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Southern Union N/A N/A N/A $2.02 N/A
UGI $6.12 billion 1.35 $436.60 million $2.46 19.47

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

Dividends

UGI pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Southern Union does not pay a dividend. UGI pays out 40.7% of its earnings in the form of a dividend. Southern Union has increased its dividend for 31 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Southern Union and UGI, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern Union 0 0 0 0 N/A
UGI 1 1 1 0 2.00

UGI has a consensus target price of $46.50, indicating a potential downside of 2.90%.

Institutional & Insider Ownership

78.5% of UGI shares are owned by institutional investors. 2.2% of UGI shares are owned by company 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.

Risk & Volatility

Southern Union has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, UGI has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Summary

UGI beats Southern Union on 9 of the 12 factors compared between the two stocks.

Southern Union Company Profile

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.

UGI 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.

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