WGL Holdings (NYSE: WGL) and Spire (NYSE:SR) are both mid-cap utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitabiliy, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares WGL Holdings and Spire’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WGL Holdings 7.60% 11.76% 2.73%
Spire 9.12% 8.77% 2.63%

Risk & Volatility

WGL Holdings has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Spire has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for WGL Holdings and Spire, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WGL Holdings 1 3 0 0 1.75
Spire 1 4 1 0 2.00

WGL Holdings currently has a consensus target price of $71.00, indicating a potential downside of 17.21%. Spire has a consensus target price of $69.60, indicating a potential downside of 8.18%. Given Spire’s stronger consensus rating and higher probable upside, analysts plainly believe Spire is more favorable than WGL Holdings.

Dividends

WGL Holdings pays an annual dividend of $2.04 per share and has a dividend yield of 2.4%. Spire pays an annual dividend of $2.10 per share and has a dividend yield of 2.8%. WGL Holdings pays out 58.1% of its earnings in the form of a dividend. Spire pays out 60.2% 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 increased its dividend for 40 consecutive years. Spire is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

68.0% of WGL Holdings shares are owned by institutional investors. Comparatively, 74.7% of Spire shares are owned by institutional investors. 1.0% of WGL Holdings shares are owned by insiders. Comparatively, 3.1% of Spire shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares WGL Holdings and Spire’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
WGL Holdings $2.39 billion 1.84 $469.69 million $3.51 24.43
Spire $1.76 billion 2.07 $462.00 million $3.49 21.72

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

Summary

Spire beats WGL Holdings on 9 of the 17 factors compared between the two stocks.

WGL Holdings Company Profile

WGL Holdings, Inc. (WGL) is a holding company. The Company operates through four segments. The Regulated Utility segment consists of Washington Gas Light Company, which provides regulated gas distribution services to end use customers and natural gas transportation services to an unaffiliated natural gas distribution company and Hampshire Gas Company, which provides regulated interstate natural gas storage services. The Retail Energy-Marketing segment consists of the operations of WGL Energy Services, Inc., which sells natural gas and electricity directly to retail customers. The Commercial Energy Systems segment consists of the operations of WGL Energy Systems, Inc., WGSW, Inc. and the results of operations of affiliate-owned commercial distributed energy projects. The Midstream Energy Services segment consists of the operations of WGL Midstream, Inc., which engages in acquiring, investing in, managing and optimizing natural gas storage and transportation assets.

Spire Company Profile

Spire Inc., formerly The Laclede Group, Inc., is engaged to transform its business and pursue growth by growing its gas utility business through prudent investment in infrastructure upgrades and organic growth initiatives; acquire and integrate gas utilities; modernize its gas assets, and invest in innovation. The Company has two business segments, which include gas utility and gas marketing. The gas utility segment includes the regulated operations of Laclede Gas Company (Laclede Gas), Alabama Gas Corporation (Alagasco) and EnergySouth, Inc. (EnergySouth). The gas marketing segment includes Laclede Energy Resources, Inc. (LER), a subsidiary engaged in the marketing of natural gas and related activities on a non-regulated basis. Laclede Gas is engaged in the purchase, retail distribution and sale of natural gas, serving residential, commercial and industrial customers, through Missouri Gas Energy (MGE), Kansas City and western Missouri.

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