Critical Review: China Gas (OTCMKTS:CGHLY) versus UGI (NYSE:UGI)

China Gas (OTCMKTS:CGHLY) and UGI (NYSE:UGI) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Insider and Institutional Ownership

82.3% of UGI shares are owned by institutional investors. 0.6% of UGI shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares China Gas and UGI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Gas	N/A	N/A	N/A
UGI	9.20%	12.80%	4.15%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for China Gas and UGI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Gas	0	0	0	0	0.00
UGI	1	2	3	0	2.33

UGI has a consensus target price of $42.00, indicating a potential upside of 8.96%. Given UGI’s stronger consensus rating and higher probable upside, analysts plainly believe UGI is more favorable than China Gas.

Valuation and Earnings

This table compares China Gas and UGI”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Gas	N/A	N/A	N/A	N/A	N/A
UGI	$7.29 billion	1.13	$678.00 million	$2.99	12.89

UGI has higher revenue and earnings than China Gas.

Summary

UGI beats China Gas on 9 of the 9 factors compared between the two stocks.

About China Gas

China Gas Holdings Limited operates as a gas operator and service provider in the People's Republic of China. The company invests in, constructs, operates, and maintains city and town gas pipelines, gas terminals, storage and transportation facilities, and gas logistics systems; transmits natural gas and liquefied petroleum gas (LPG) to residential, industrial, and commercial users; constructs and operates compressed natural gas/liquefied natural gas refilling stations; and develops technologies related to natural gas and LPG. It is also involved in the investment in petrochemical facilities of storage and transportation; producing, storing, and selling of LPG and chemical products, as well as propane and butane; CBM business; exploration and production of coal bed methane; and gas station administration services. In addition, the company offers treasury, management, consultancy, and procurement services; and engages in wholesale and retail of household equipment, electric appliances, kitchen appliances, and others. Further, it is involved in the development and investment in clean energy; wholesale and trading of natural gas and liquefied natural gas; and sale of electricity, as well as develops, produces, and sells gas meters, and other utility systems. Additionally, the company offers gas stoves, water heater, and wall-mounting heaters; safety products, such as pipes, valves, and alarms; food staples, and cooking ingredients. Furthermore, the company engages in the wholesale, retail, installs, and maintains of household equipment, electric appliances, and kitchen appliances, as well as involved in investment holding and distributes heating services. China Gas Holdings Limited was incorporated in 1995 and is headquartered in Wan Chai, Hong Kong.

About UGI

UGI Corporation, together with its subsidiaries, distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.3 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,400 propane distribution locations. The company distributes liquefied petroleum gases (LPG) to residential, commercial, industrial, agricultural, wholesale and automobile fuel customers; and provides logistics, storage, and other services to third-party LPG distributors. In addition, it engages in the retail sale of natural gas, liquid fuels, and electricity to approximately 12,400 residential, commercial, and industrial customers at 42,000 locations. Further, the company distributes natural gas to approximately 677,000 customers in eastern and central Pennsylvania counties through its distribution system of approximately 12,500 miles of gas mains; and supplies electricity to approximately 62,600 customers in northeastern Pennsylvania through 2,560 miles of lines and 14 substations. Additionally, it operates electric generation facilities, which include coal-fired, landfill gas-fueled, solar-powered, and natural gas-fueled facilities; a natural gas liquefaction, storage, and vaporization facility; propane storage and propane-air mixing stations; and rail transshipment terminals. It manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities. UGI Corporation was incorporated in 1882 and is headquartered in King of Prussia, Pennsylvania.