Delta Natural Gas (NASDAQ: DGAS) and UGI Corporation (NYSE:UGI) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Delta Natural Gas and UGI Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delta Natural Gas 0 0 0 0 N/A
UGI Corporation 1 1 1 0 2.00

UGI Corporation has a consensus target price of $46.00, suggesting a potential downside of 5.68%. Given UGI Corporation’s higher probable upside, analysts plainly believe UGI Corporation is more favorable than Delta Natural Gas.

Dividends

Delta Natural Gas pays an annual dividend of $0.83 per share and has a dividend yield of 2.7%. UGI Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. 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. UGI Corporation pays out 45.9% of its earnings in the form of a dividend. UGI Corporation has increased its dividend for 31 consecutive years.

Institutional and Insider Ownership

37.4% of Delta Natural Gas shares are held by institutional investors. Comparatively, 77.9% of UGI Corporation shares are held by institutional investors. 4.2% of Delta Natural Gas shares are held by insiders. Comparatively, 2.2% of UGI Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Delta Natural Gas and UGI Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Delta Natural Gas $67.09 million 3.26 $20.21 million $0.89 34.45
UGI Corporation $5.98 billion 1.41 $1.35 billion $2.18 22.37

UGI Corporation has higher revenue and earnings than Delta Natural Gas. UGI Corporation 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.

Profitability

This table compares Delta Natural Gas and UGI Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Delta Natural Gas 8.00% 7.12% 2.91%
UGI Corporation 6.48% 10.44% 3.54%

Risk and Volatility

Delta Natural Gas has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, UGI Corporation has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

UGI Corporation beats Delta Natural Gas on 11 of the 16 factors compared between the two stocks.

Delta Natural Gas Company Profile

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.

UGI Corporation Company Profile

UGI Corporation is a holding company. The Company distributes, stores, transports and markets energy products and related services. It operates through six segments. The AmeriGas Propane segment consists of the propane distribution business of AmeriGas Partners, L.P. The UGI France segment consists of the French LPG distribution business of its subsidiaries, Antargaz, Finagaz and its liquefied petroleum gases (LPG) distribution businesses. The Flaga & Other segment consists of the LPG distribution businesses of Flaga GmbH, AvantiGas Limited and ChinaGas Partners, L.P. The Energy Services segment consists of energy-related businesses conducted by its subsidiary, UGI Energy Services, LLC (Energy Services). The Electric Generation segment consists of electric generation facilities conducted by Energy Services’ subsidiary. The Gas Utility segment consists of the regulated natural gas distribution businesses of its subsidiary, UGI Utilities, Inc.

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