Critical Contrast: National Fuel Gas (NFG) vs. WGL Holdings (WGL)
National Fuel Gas (NYSE: NFG) and WGL Holdings (NYSE:WGL) are both mid-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.
National Fuel Gas pays an annual dividend of $1.66 per share and has a dividend yield of 2.8%. WGL Holdings pays an annual dividend of $2.04 per share and has a dividend yield of 2.4%. National Fuel Gas pays out 51.7% of its earnings in the form of a dividend. WGL Holdings pays out 58.1% 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. National Fuel Gas has raised its dividend for 46 consecutive years and WGL Holdings has raised its dividend for 40 consecutive years. National Fuel Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
71.8% of National Fuel Gas shares are held by institutional investors. Comparatively, 69.1% of WGL Holdings shares are held by institutional investors. 2.6% of National Fuel Gas shares are held by company insiders. Comparatively, 1.1% of WGL Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares National Fuel Gas and WGL Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|National Fuel Gas||$1.59 billion||3.15||$804.38 million||$3.21||18.27|
|WGL Holdings||$2.39 billion||1.81||$465.84 million||$3.51||24.11|
National Fuel Gas has higher revenue, but lower earnings than WGL Holdings. National Fuel Gas is trading at a lower price-to-earnings ratio than WGL Holdings, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
National Fuel Gas has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, WGL Holdings has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.
This table compares National Fuel Gas and WGL Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|National Fuel Gas||17.38%||18.31%||5.13%|
This is a summary of recent ratings and recommmendations for National Fuel Gas and WGL Holdings, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Fuel Gas||0||3||0||0||2.00|
National Fuel Gas presently has a consensus price target of $57.00, indicating a potential downside of 2.83%. WGL Holdings has a consensus price target of $71.00, indicating a potential downside of 16.10%. Given National Fuel Gas’ higher possible upside, analysts plainly believe National Fuel Gas is more favorable than WGL Holdings.
National Fuel Gas beats WGL Holdings on 12 of the 15 factors compared between the two stocks.
National Fuel Gas Company Profile
National Fuel Gas Company is a holding company. The Company is an energy company engaged principally in the production, gathering, transportation, distribution and marketing of natural gas. The Company operates in five business segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. The Company operates an integrated business, with assets centered in western New York and Pennsylvania, and the production and transportation of natural gas from the Marcellus Shale basin. The Company also develops and produces oil reserves, primarily in California. The Company’s Exploration and Production segment operations are carried out by Seneca Resources Corporation (Seneca), a Pennsylvania corporation. The Company’s National Fuel Gas Supply Corporation (Supply Corporation), a Pennsylvania corporation, and Empire Pipeline, Inc. (Empire), a New York corporation, carry out the Company’s Pipeline and Storage segment operations.
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.
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