Head to Head Analysis: RGC Resources (RGCO) versus Its Competitors

RGC Resources (NASDAQ: RGCO) is one of 14 publicly-traded companies in the “Natural Gas Distribution” industry, but how does it contrast to its rivals? We will compare RGC Resources to related businesses based on the strength of its analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Analyst Recommendations

This is a summary of recent ratings and price targets for RGC Resources and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RGC Resources 0 0 1 0 3.00
RGC Resources Competitors 66 226 244 7 2.35

RGC Resources currently has a consensus target price of $27.00, suggesting a potential upside of 16.38%. As a group, “Natural Gas Distribution” companies have a potential upside of 16.05%. Given RGC Resources’ stronger consensus rating and higher possible upside, equities research analysts clearly believe RGC Resources is more favorable than its rivals.

Volatility & Risk

RGC Resources has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500. Comparatively, RGC Resources’ rivals have a beta of 0.38, suggesting that their average stock price is 62% less volatile than the S&P 500.

Earnings & Valuation

This table compares RGC Resources and its rivals gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
RGC Resources $62.30 million $6.23 million 27.95
RGC Resources Competitors $2.09 billion $171.32 million 19.07

RGC Resources’ rivals have higher revenue and earnings than RGC Resources. RGC Resources is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

RGC Resources pays an annual dividend of $0.62 per share and has a dividend yield of 2.7%. RGC Resources pays out 74.7% of its earnings in the form of a dividend. As a group, “Natural Gas Distribution” companies pay a dividend yield of 2.8% and pay out 59.0% of their earnings in the form of a dividend. RGC Resources lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares RGC Resources and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RGC Resources 9.73% 9.64% 3.16%
RGC Resources Competitors 4.79% -12.04% 3.92%

Institutional and Insider Ownership

65.6% of shares of all “Natural Gas Distribution” companies are owned by institutional investors. 8.9% of RGC Resources shares are owned by company insiders. Comparatively, 2.2% of shares of all “Natural Gas Distribution” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

RGC Resources rivals beat RGC Resources on 8 of the 15 factors compared.

About RGC Resources

RGC Resources, Inc. (Resources) is an energy services company. The Company is engaged in the regulated sale and distribution of natural gas to residential, commercial and industrial customers in Roanoke, Virginia, and the surrounding localities, through its Roanoke Gas Company (Roanoke Gas) subsidiary. Roanoke Gas also provides certain non-regulated services. It maintains an integrated natural gas distribution system to deliver natural gas purchased from suppliers to residential, commercial and industrial users in its service territory. As of September 30, 2016, Resources had approximately 1,132 miles of transmission and distribution pipeline. As of September 30, 2016, Roanoke Gas owned and operated eight metering stations. It also owns a liquefied natural gas storage facility located in Botetourt County that has the capacity to store up to 220,000 dekatherm (DTH) of natural gas. The Company’s subsidiaries also include Diversified Energy Company and RGC Midstream, LLC.

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