South Jersey Industries (NYSE: SJI) and Delta Natural Gas (NASDAQ:DGAS) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Profitability

This table compares South Jersey Industries and Delta Natural Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
South Jersey Industries 7.02% 7.71% 2.68%
Delta Natural Gas 9.35% 8.08% 3.31%

Earnings and Valuation

This table compares South Jersey Industries and Delta Natural Gas’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
South Jersey Industries $1.22 billion 2.30 $261.72 million $1.07 33.06
Delta Natural Gas $67.09 million 3.24 $20.21 million $0.89 34.31

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

Analyst Recommendations

This is a summary of current ratings for South Jersey Industries and Delta Natural Gas, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
South Jersey Industries 0 3 3 0 2.50
Delta Natural Gas 0 0 0 0 N/A

South Jersey Industries currently has a consensus target price of $38.33, suggesting a potential upside of 8.38%. Given South Jersey Industries’ higher possible upside, equities analysts clearly believe South Jersey Industries is more favorable than Delta Natural Gas.

Insider & Institutional Ownership

69.3% of South Jersey Industries shares are owned by institutional investors. Comparatively, 36.4% of Delta Natural Gas shares are owned by institutional investors. 0.6% of South Jersey Industries shares are owned by company insiders. Comparatively, 4.2% of Delta Natural Gas 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.

Dividends

South Jersey Industries pays an annual dividend of $1.09 per share and has a dividend yield of 3.1%. Delta Natural Gas pays an annual dividend of $0.83 per share and has a dividend yield of 2.7%. 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. Delta Natural Gas pays out 93.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

South Jersey Industries has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Delta Natural Gas has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Summary

South Jersey Industries beats Delta Natural Gas on 8 of the 15 factors compared between the two stocks.

About South Jersey Industries

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.

About Delta Natural Gas

Delta Natural Gas Company, Inc. distributes or transports natural gas to approximately 36,000 customers. The Company’s segments include regulated segment and non-regulated segment. Through regulated segment, the Company distributes natural gas to its retail customers in approximately 23 rural counties. Its three service areas are Nicholasville, Corbin and Berea, Kentucky. The non-regulated segment includes the Company’s three subsidiaries, Delta Resources, Inc. and Delgasco, Inc. (Delgasco), which purchase natural gas in the open market, including natural gas from Kentucky producers, and Enpro, Inc. (Enpro), which produces natural gas that is sold to Delgasco for resale in the open market. The Company owns approximately 2,600 miles of natural gas gathering, transmission, distribution and storage lines. These lines range in size over 12 inches in diameter. It also holds leases for the storage of natural gas under approximately 8,000 acres located in Bell County, Kentucky.

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