Chesapeake Utilities Corporation (NYSE: CPK) and South Jersey Industries (NYSE:SJI) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitabiliy, valuation, institutional ownership and risk.

Analyst Recommendations

This is a summary of current ratings for Chesapeake Utilities Corporation and South Jersey Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chesapeake Utilities Corporation 0 4 1 0 2.20
South Jersey Industries 0 3 2 0 2.40

Chesapeake Utilities Corporation presently has a consensus target price of $69.50, suggesting a potential downside of 11.69%. South Jersey Industries has a consensus target price of $36.00, suggesting a potential upside of 4.99%. Given South Jersey Industries’ stronger consensus rating and higher possible upside, analysts plainly believe South Jersey Industries is more favorable than Chesapeake Utilities Corporation.

Profitability

This table compares Chesapeake Utilities Corporation and South Jersey Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chesapeake Utilities Corporation 7.40% 9.25% 3.45%
South Jersey Industries 7.83% 8.04% 2.84%

Dividends

Chesapeake Utilities Corporation pays an annual dividend of $1.30 per share and has a dividend yield of 1.7%. South Jersey Industries pays an annual dividend of $1.09 per share and has a dividend yield of 3.2%. Chesapeake Utilities Corporation pays out 50.8% of its earnings in the form of a dividend. South Jersey Industries pays out 101.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Utilities Corporation has raised its dividend for 13 consecutive years.

Volatility & Risk

Chesapeake Utilities Corporation has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, South Jersey Industries has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Valuation & Earnings

This table compares Chesapeake Utilities Corporation and South Jersey Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chesapeake Utilities Corporation $537.72 million 2.39 $123.36 million $2.56 30.74
South Jersey Industries $1.13 billion 2.41 $255.91 million $1.07 32.05

South Jersey Industries has higher revenue and earnings than Chesapeake Utilities Corporation. Chesapeake Utilities Corporation is trading at a lower price-to-earnings ratio than South Jersey Industries, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

60.0% of Chesapeake Utilities Corporation shares are held by institutional investors. Comparatively, 69.6% of South Jersey Industries shares are held by institutional investors. 5.4% of Chesapeake Utilities Corporation shares are held by insiders. Comparatively, 0.6% of South Jersey Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

South Jersey Industries beats Chesapeake Utilities Corporation on 10 of the 17 factors compared between the two stocks.

Chesapeake Utilities Corporation Company Profile

Chesapeake Utilities Corporation (Chesapeake) is an energy company. The Company operates through two segments: Regulated Energy and Unregulated Energy. The Company provides natural gas distribution and transmission; natural gas supply, gathering, processing and marketing; electric distribution and generation; propane distribution; propane and crude oil wholesale marketing; steam generation, and other energy-related services. The Regulated Energy segment includes the Company’s natural gas distribution, natural gas transmission and electric distribution operations. The Unregulated Energy segment includes its propane distribution, propane and crude oil wholesale marketing, natural gas marketing and unregulated natural gas supply, gathering and processing, electricity and steam generation and other unregulated energy-related services to customers.

South Jersey Industries Company Profile

South Jersey Industries, Inc. (SJI) is an energy services holding company. The Company provides a range of energy-related products and services, primarily through its subsidiaries. Its subsidiaries include South Jersey Gas Company (SJG), South Jersey Energy Company (SJE), South Jersey Resources Group, LLC (SJRG), South Jersey Exploration, LLC (SJEX), Marina Energy, LLC (Marina), South Jersey Energy Service Plus, LLC (SJESP) and SJI Midstream, LLC (Midstream). Its segments include Gas utility operations (SJG), which consist primarily of natural gas distribution; Wholesale energy operations, which include the activities of SJRG and SJEX; SJE, which is involved in both retail gas and retail electric activities; On-Site energy production, which consists of Marina’s thermal energy facility; Appliance service operations, which include SJESP, and Corporate and Services segment, which includes the activities of Midstream.

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