Analyzing ONE Gas (NYSE:OGS) & Spire (NYSE:SR)

Spire (NYSE:SR) and ONE Gas (NYSE:OGS) 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, dividends, valuation, risk, profitability, institutional ownership and earnings.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spire	$2.48 billion	2.13	$271.70 million	$8.97	9.97
ONE Gas	$2.32 billion	2.21	$264.22 million	$4.69	17.46

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

Profitability

This table compares Spire and ONE Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spire	21.48%	8.65%	2.21%
ONE Gas	12.61%	8.80%	3.48%

Dividends

Spire pays an annual dividend of $3.30 per share and has a dividend yield of 3.7%. ONE Gas pays an annual dividend of $2.72 per share and has a dividend yield of 3.3%. Spire pays out 36.8% of its earnings in the form of a dividend. ONE Gas pays out 58.0% 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. Spire has raised its dividend for 22 consecutive years and ONE Gas has raised its dividend for 2 consecutive years. Spire is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings for Spire and ONE Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spire	0	5	7	1	2.69
ONE Gas	0	6	7	0	2.54

Spire presently has a consensus price target of $92.91, suggesting a potential upside of 3.88%. ONE Gas has a consensus price target of $87.12, suggesting a potential upside of 6.40%. Given ONE Gas’ higher possible upside, analysts clearly believe ONE Gas is more favorable than Spire.

Institutional & Insider Ownership

87.4% of Spire shares are owned by institutional investors. Comparatively, 88.7% of ONE Gas shares are owned by institutional investors. 2.3% of Spire shares are owned by company insiders. Comparatively, 0.9% of ONE Gas shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Spire has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, ONE Gas has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Summary

Spire beats ONE Gas on 10 of the 17 factors compared between the two stocks.

About Spire

Spire Inc., together with its subsidiaries, engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates through three segments: Gas Utility, Gas Marketing, and Midstream. It is also involved in the marketing of natural gas and related services; and transportation and storage of natural gas. In addition, the company engages in the operation of propane through its propane pipeline, risk management, and other activities. The company was formerly known as The Laclede Group, Inc. and changed its name to Spire Inc. in April 2016. Spire Inc. was founded in 1857 and is based in Saint Louis, Missouri.

About ONE Gas

ONE Gas, Inc., together with its subsidiaries, operates as a regulated natural gas distribution company in the United States. The company provides natural gas distribution services to approximately 2.3 million customers in Oklahoma, Kansas, and Texas. It serves residential, commercial, and transportation customers. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.