Financial Survey: Chesapeake Utilities (NYSE:CPK) & Northwest Natural Gas (NYSE:NWN)

Northwest Natural Gas (NYSE:NWN) and Chesapeake Utilities (NYSE:CPK) are both mid-cap utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.

Risk & Volatility

Northwest Natural Gas has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, Chesapeake Utilities has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Dividends

Northwest Natural Gas pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. Chesapeake Utilities pays an annual dividend of $2.94 per share and has a dividend yield of 2.1%. Northwest Natural Gas pays out 66.2% of its earnings in the form of a dividend. Chesapeake Utilities pays out 46.4% 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. Northwest Natural Gas has increased its dividend for 70 consecutive years and Chesapeake Utilities has increased its dividend for 22 consecutive years. Northwest Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings for Northwest Natural Gas and Chesapeake Utilities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northwest Natural Gas	0	5	3	2	2.70
Chesapeake Utilities	0	2	2	2	3.00

Northwest Natural Gas presently has a consensus price target of $55.43, suggesting a potential upside of 7.21%. Chesapeake Utilities has a consensus price target of $143.75, suggesting a potential upside of 2.37%. Given Northwest Natural Gas’ higher possible upside, equities analysts plainly believe Northwest Natural Gas is more favorable than Chesapeake Utilities.

Valuation & Earnings

This table compares Northwest Natural Gas and Chesapeake Utilities”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northwest Natural Gas	$1.29 billion	1.69	$113.32 million	$3.02	17.12
Chesapeake Utilities	$930.00 million	3.69	$140.30 million	$6.34	22.15

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

Insider & Institutional Ownership

75.1% of Northwest Natural Gas shares are owned by institutional investors. Comparatively, 83.1% of Chesapeake Utilities shares are owned by institutional investors. 0.6% of Northwest Natural Gas shares are owned by company insiders. Comparatively, 1.4% of Chesapeake Utilities shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Northwest Natural Gas and Chesapeake Utilities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northwest Natural Gas	9.65%	8.23%	1.97%
Chesapeake Utilities	15.09%	9.21%	3.68%

Summary

Chesapeake Utilities beats Northwest Natural Gas on 12 of the 17 factors compared between the two stocks.

About Northwest Natural Gas

Northwest Natural Gas, now organized as NW Natural Holdings, is a utility company whose principal business is the distribution of natural gas through its NW Natural subsidiary. The company serves residential, commercial and industrial customers in Oregon and southwest Washington. Founded in 1859 as the Portland Gas Light Company, the business has grown from a local gas provider into a regional utility. Its operations also include natural gas storage and, through subsidiaries, water and wastewater services.

About Chesapeake Utilities

Chesapeake Utilities Corporation is a diversified energy company that delivers natural gas, propane and electricity to residential, commercial and industrial customers. Its businesses also include natural gas transmission and distribution, energy generation, and renewable natural gas projects. The company serves customers across Delaware, Maryland, Florida and other parts of the Mid-Atlantic and Southeast. Its operations include regulated natural gas and electric utilities as well as unregulated propane distribution and energy-related services.