Regency Energy Partners (NASDAQ: RGNC) and ONE Gas (NYSE:OGS) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Insider & Institutional Ownership

73.2% of ONE Gas shares are owned by institutional investors. 1.5% of ONE Gas shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

ONE Gas pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. Regency Energy Partners does not pay a dividend. ONE Gas pays out 58.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Regency Energy Partners and ONE Gas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regency Energy Partners 0 0 0 0 N/A
ONE Gas 2 2 0 0 1.50

ONE Gas has a consensus target price of $64.00, indicating a potential downside of 14.45%. Given ONE Gas’ higher possible upside, analysts plainly believe ONE Gas is more favorable than Regency Energy Partners.

Earnings & Valuation

This table compares Regency Energy Partners and ONE Gas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Regency Energy Partners N/A N/A N/A N/A N/A
ONE Gas $1.50 billion 2.61 $427.06 million $2.87 26.07

ONE Gas has higher revenue and earnings than Regency Energy Partners.

Profitability

This table compares Regency Energy Partners and ONE Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regency Energy Partners -0.30% -0.47% -0.07%
ONE Gas 10.12% 7.98% 3.14%

Summary

ONE Gas beats Regency Energy Partners on 8 of the 9 factors compared between the two stocks.

About Regency Energy Partners

Regency Energy Partners LP gathers and processes, compress, treats and transports natural gas; transports, fractionates and stores natural gas liquids (NGLs); gathers, transports and terminals oil received from producers; gathers and disposes salt water, and manages coal and natural resource properties in the United States. The Company has six business segments: Gathering and Processing, Natural Gas Transportation, NGL Services, Contract Services, Natural Resources and Corporate. The Gathering and Processing segment provides wellhead-to-market services to producers of natural gas. The Natural Gas Transportation segment owns a 49.99% general partner interest in RIGS Haynesville Partnership Co. The NGL Services segment owns a 30% membership interest in Lone Star NGL LLC. The Contract Services segment owns and operates a fleet of compressors. The Natural Resources segment manages coal and natural resources properties. The Corporate segment includes its corporate assets.

About ONE Gas

ONE Gas, Inc. is a regulated natural gas distribution utility in the United States. The Company provides natural gas distribution services. The Company distributes natural gas in Oklahoma, Kansas and Texas. The Company serves residential, commercial and industrial, transportation and wholesale and public authority customers. The Company’s natural gas distribution markets in terms of customers are Oklahoma City and Tulsa, Oklahoma; Kansas City, Wichita and Topeka, Kansas, and Austin and El Paso, Texas. As of December 31, 2016, its three divisions, Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, distribute natural gas to approximately 88%, 72% and 13% of the natural gas distribution customers in Oklahoma, Kansas and Texas, respectively. As of December 31, 2016, the Company had 50.4 billion cubic feet (Bcf) of natural gas storage capacity under lease with remaining terms ranging from 1 to 10 years and maximum allowable daily withdrawal capacity of approximately 1.3 Bcf.

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