Questar (NYSE: STR) and Piedmont Natural Gas (NYSE:PNY) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitabiliy, institutional ownership, dividends and valuation.

Risk and Volatility

Questar has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, Piedmont Natural Gas has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Questar and Piedmont Natural Gas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Questar 0 1 0 0 2.00
Piedmont Natural Gas 0 0 0 0 N/A

Questar presently has a consensus price target of $25.00, indicating a potential downside of 0.24%. Given Questar’s higher possible upside, equities analysts plainly believe Questar is more favorable than Piedmont Natural Gas.

Valuation and Earnings

This table compares Questar and Piedmont Natural Gas’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Questar N/A N/A N/A $1.11 22.58
Piedmont Natural Gas N/A N/A N/A $1.72 34.90

Questar is trading at a lower price-to-earnings ratio than Piedmont Natural Gas, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

78.9% of Questar shares are held by institutional investors. Comparatively, 61.5% of Piedmont Natural Gas shares are held by institutional investors. 0.4% of Questar shares are held by company insiders. Comparatively, 1.4% of Piedmont Natural Gas shares are held 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.

Dividends

Questar pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. Piedmont Natural Gas pays an annual dividend of $1.36 per share and has a dividend yield of 2.3%. Questar pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Piedmont Natural Gas pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Questar has raised its dividend for 37 consecutive years and Piedmont Natural Gas has raised its dividend for 38 consecutive years.

Profitability

This table compares Questar and Piedmont Natural Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Questar 19.01% 9.76% 3.19%
Piedmont Natural Gas 19.00% 22.34% 6.57%

Summary

Piedmont Natural Gas beats Questar on 7 of the 11 factors compared between the two stocks.

Questar Company Profile

Dominion Questar Corp, formerly Questar Corporation, is an integrated natural gas holding company. The Company, through its subsidiaries is principally engaged in three lines of business, which include Questar Gas Company (Questar Gas), which provides retail natural gas distribution in Utah, Wyoming and Idaho; Wexpro Company (Wexpro), which develops and produces natural gas from cost-of-service reserves for Questar Gas customers, and Questar Pipeline Company, which operates interstate natural gas pipelines and storage facilities in the western the United States and provides other energy services. The Company is also engaged in Corporate and Other operations, which include Questar Fueling Company (Questar Fueling) that builds, owns and operates compressed natural gas (CNG) fueling stations for fleet operators with medium- and heavy-duty trucks and tractors. Questar Gas distributes gas to customers along the Wasatch Front, Provo, Salt Lake, Ogden and other areas in Utah.

Piedmont Natural Gas Company Profile

Piedmont Natural Gas Company, Inc. is an energy services company. The Company’s principal business is the distribution of natural gas to residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities, which are its wholesale customers. The Company operates through three segments: regulated utility, regulated non-utility activities and unregulated non-utility activities. The regulated utility segment includes operating a natural gas distribution system. The regulated non-utility activities segment consists of its equity method investments in regulated energy-related joint ventures that are held by its subsidiaries. The unregulated non-utility activities segment consists primarily of its equity method investment in an unregulated energy-related joint venture that is held by its subsidiary.

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