Southwest Gas (SWX) and Southern Union (SUG) Head-To-Head Review

Southwest Gas (NYSE: SWX) and Southern Union (NYSE:SUG) are both mid-cap utilities companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Volatility & Risk

Southwest Gas has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Southern Union has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Profitability

This table compares Southwest Gas and Southern Union’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwest Gas 6.64% 9.56% 2.87%
Southern Union N/A N/A N/A

Analyst Ratings

This is a breakdown of recent ratings and price targets for Southwest Gas and Southern Union, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwest Gas 0 4 0 0 2.00
Southern Union 0 0 0 0 N/A

Southwest Gas presently has a consensus target price of $80.00, indicating a potential downside of 2.08%.

Valuation & Earnings

This table compares Southwest Gas and Southern Union’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Southwest Gas $2.46 billion 1.58 $152.04 million $3.40 24.03
Southern Union N/A N/A N/A $2.02 N/A

Southwest Gas has higher revenue and earnings than Southern Union. Southern Union is trading at a lower price-to-earnings ratio than Southwest Gas, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

75.6% of Southwest Gas shares are owned by institutional investors. 1.0% of Southwest Gas shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Southwest Gas pays an annual dividend of $1.98 per share and has a dividend yield of 2.4%. Southern Union does not pay a dividend. Southwest Gas pays out 58.2% of its earnings in the form of a dividend. Southern Union has increased its dividend for 5 consecutive years.

Summary

Southwest Gas beats Southern Union on 8 of the 11 factors compared between the two stocks.

Southwest Gas Company Profile

Southwest Gas Holdings, Inc., formerly Southwest Gas Corporation, is engaged in the business of purchasing, distributing and transporting natural gas. The Company operates through two segments: natural gas operations and construction services, which includes the operations of the Company’s subsidiary, Centuri Construction Group, Inc. (Centuri). The Company operates two pipeline transmission systems, such as a system, which includes a liquefied natural gas (LNG) storage facility owned by Paiute extending from the Idaho-Nevada border to the Reno, Sparks, and Carson City areas and communities in the Lake Tahoe area in both California and Nevada and other communities in northern and western Nevada, and a system extending from the Colorado River at the southern tip of Nevada to the Las Vegas distribution area.

Southern Union Company Profile

Southern Union Company (Southern Union) is engaged in the gathering, processing, transportation, storage and distribution of natural gas in the United States. The Company owns and operates assets in the regulated and unregulated natural gas industry. Southern Union operates in three segments: Transportation and Storage, which is engaged in the interstate transportation and storage of natural gas and provides liquefied natural gas (LNG) terminalling and re-gasification services; Gathering and Processing, which is engaged in the gathering, treating, processing and redelivery of natural gas and natural gas liquid (NGL) in Texas and New Mexico, and Distribution, which is engaged in the local distribution of natural gas in Missouri. Effective December 20, 2013, Algonquin Power & Utilities Corp. (APUC) announced that, Liberty Utilities, APUC’s regulated distribution utility, acquired the Massachusetts natural gas distribution utility assets (New England Gas Assets) of Southern Union Company.

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