Head to Head Survey: Delta Natural Gas (DGAS) and The Competition

Delta Natural Gas (NASDAQ: DGAS) is one of 16 publicly-traded companies in the “Natural Gas Distribution” industry, but how does it contrast to its peers? We will compare Delta Natural Gas to similar companies based on the strength of its institutional ownership, profitability, earnings, analyst recommendations, risk, valuation and dividends.

Dividends

Delta Natural Gas pays an annual dividend of $0.75 per share and has a dividend yield of 2.4%. Delta Natural Gas pays out 97.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Natural Gas Distribution” companies pay a dividend yield of 2.5% and pay out 61.6% of their earnings in the form of a dividend. Delta Natural Gas lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Delta Natural Gas and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Delta Natural Gas -3.88% -2.51% -1.03%
Delta Natural Gas Competitors 4.40% -9.37% 3.20%

Earnings & Valuation

This table compares Delta Natural Gas and its peers revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Delta Natural Gas N/A N/A 39.86
Delta Natural Gas Competitors $2.04 billion $171.22 million 15.67

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

Institutional and Insider Ownership

36.8% of Delta Natural Gas shares are owned by institutional investors. Comparatively, 65.4% of shares of all “Natural Gas Distribution” companies are owned by institutional investors. 4.2% of Delta Natural Gas 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, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Delta Natural Gas and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delta Natural Gas 0 0 0 0 N/A
Delta Natural Gas Competitors 56 204 214 5 2.35

As a group, “Natural Gas Distribution” companies have a potential downside of 0.97%. Given Delta Natural Gas’ peers higher probable upside, analysts clearly believe Delta Natural Gas has less favorable growth aspects than its peers.

Summary

Delta Natural Gas peers beat Delta Natural Gas on 7 of the 9 factors compared.

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.

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