Just Energy Group (NYSE: JE) and RGC Resources (NASDAQ:RGCO) are both small-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.
This table compares Just Energy Group and RGC Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Just Energy Group||5.74%||-214.69%||23.59%|
28.3% of Just Energy Group shares are owned by institutional investors. 8.9% of RGC Resources shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Just Energy Group pays an annual dividend of $0.40 per share and has a dividend yield of 7.9%. RGC Resources pays an annual dividend of $0.62 per share and has a dividend yield of 2.7%. Just Energy Group pays out 58.8% of its earnings in the form of a dividend. RGC Resources pays out 74.7% 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. Just Energy Group has raised its dividend for 2 consecutive years. Just Energy Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Just Energy Group and RGC Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Just Energy Group||$2.84 billion||0.26||$340.07 million||$0.68||7.43|
|RGC Resources||$62.30 million||2.70||$6.23 million||$0.83||27.95|
Just Energy Group has higher revenue and earnings than RGC Resources. Just Energy Group is trading at a lower price-to-earnings ratio than RGC Resources, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Just Energy Group has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, RGC Resources has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500.
This is a summary of recent ratings for Just Energy Group and RGC Resources, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Just Energy Group||0||1||6||0||2.86|
Just Energy Group currently has a consensus target price of $7.75, suggesting a potential upside of 53.47%. RGC Resources has a consensus target price of $27.00, suggesting a potential upside of 16.38%. Given Just Energy Group’s higher possible upside, analysts plainly believe Just Energy Group is more favorable than RGC Resources.
Just Energy Group beats RGC Resources on 10 of the 17 factors compared between the two stocks.
Just Energy Group Company Profile
Just Energy Group Inc. (Just Energy) is an energy management solutions provider engaged in electricity, natural gas, solar and green energy. The Company’s segments include Consumer Energy and Commercial Energy. The Company operates in the United States, Canada and the United Kingdom, offering a range of energy products, including long-term fixed-price, variable rate and flat bill programs; home energy management services, including smart thermostats and tools to manage energy use at the appliance level, and residential solar panel installations. It markets under the brands, such as Just Energy, Hudson Energy, Amigo Energy, GreenStar Energy, Just Solar, Tara Energy and TerraPass. Just Energy’s commercial business is operated primarily through Hudson Energy. Hudson Energy offers fixed and variable rate natural gas and electricity contracts, as well as customized products. Just Energy also offers green products through its JustGreen Electricity and Natural Gas and TerraPass programs.
RGC Resources Company Profile
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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