Southwest Gas (NYSE:SWX) & ONE Gas (NYSE:OGS) Head to Head Contrast

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southwest Gas	0	1	7	0	2.88
ONE Gas	0	6	7	0	2.54

Southwest Gas presently has a consensus price target of $101.25, indicating a potential upside of 12.72%. ONE Gas has a consensus price target of $87.04, indicating a potential upside of 7.27%. Given Southwest Gas’ stronger consensus rating and higher probable upside, equities analysts plainly believe Southwest Gas is more favorable than ONE Gas.

Dividends

Southwest Gas pays an annual dividend of $2.58 per share and has a dividend yield of 2.9%. ONE Gas pays an annual dividend of $2.72 per share and has a dividend yield of 3.4%. Southwest Gas pays out 33.7% of its earnings in the form of a dividend. ONE Gas pays out 58.6% 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. ONE Gas has raised its dividend for 2 consecutive years. ONE Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Southwest Gas has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, ONE Gas has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Insider and Institutional Ownership

92.8% of Southwest Gas shares are owned by institutional investors. Comparatively, 88.7% of ONE Gas shares are owned by institutional investors. 0.6% of Southwest Gas 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 hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southwest Gas	31.85%	6.79%	2.63%
ONE Gas	12.61%	8.81%	3.49%

Valuation and Earnings

This table compares Southwest Gas and ONE Gas”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southwest Gas	$1.94 billion	3.35	$439.83 million	$7.66	11.73
ONE Gas	$2.43 billion	2.10	$264.22 million	$4.64	17.49

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

About Southwest Gas

Southwest Gas Holdings, Inc., through its subsidiaries, distributes and transports natural gas in Arizona, Nevada, and California. The company operates through Natural Gas Distribution, Utility Infrastructure Services, and Pipeline and Storage segments. It also provides trenching, installation, and replacement of underground pipes, as well as maintenance services for energy distribution systems. As of December 31, 2023, it had 2,226,000 residential, commercial, industrial, and other natural gas customers. Southwest Gas Holdings, Inc. was incorporated in 1931 and is headquartered in Las Vegas, Nevada.

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.