Financial Analysis: ONE Gas (NYSE:OGS) versus Cheniere Energy (NYSE:LNG)

ONE Gas (NYSE:OGS) and Cheniere Energy (NYSE:LNG) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Volatility and Risk

ONE Gas has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500. Comparatively, Cheniere Energy has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Valuation & Earnings

This table compares ONE Gas and Cheniere Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ONE Gas $1.65 billion 2.47 $186.75 million $3.51 21.86
Cheniere Energy $9.73 billion 1.41 $648.00 million ($0.57) -95.51

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

Institutional and Insider Ownership

79.4% of ONE Gas shares are held by institutional investors. Comparatively, 88.6% of Cheniere Energy shares are held by institutional investors. 1.9% of ONE Gas shares are held by company insiders. Comparatively, 0.8% of Cheniere Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
ONE Gas 12.63% 8.69% 3.32%
Cheniere Energy 11.60% 16.85% 1.15%

Analyst Recommendations

This is a summary of current recommendations and price targets for ONE Gas and Cheniere Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ONE Gas 1 5 3 0 2.22
Cheniere Energy 0 0 3 0 3.00

ONE Gas presently has a consensus price target of $86.11, suggesting a potential upside of 12.21%. Cheniere Energy has a consensus price target of $66.50, suggesting a potential upside of 22.15%. Given Cheniere Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Cheniere Energy is more favorable than ONE Gas.

Summary

Cheniere Energy beats ONE Gas on 7 of the 13 factors compared between the two stocks.

ONE Gas Company Profile

ONE Gas, Inc. operates as a regulated natural gas distribution utility company in the United States. The company operates in three divisions: Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service. It provides natural gas distribution services to 2.2 million customers in three states. The company serves residential, commercial and industrial, transportation and wholesale, and public authority customers. As of December 31, 2018, it operated approximately 40,300 miles of distribution mains; and 2,600 miles of transmission pipelines, as well as had 48.4 billion cubic feet of natural gas storage capacity. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.

Cheniere Energy Company Profile

Cheniere Energy, Inc., an energy infrastructure company, engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates Sabine Pass LNG terminal in Cameron Parish, Louisiana; and Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile pipeline interconnecting the Sabine Pass LNG terminal with various interstate pipelines; and operates Corpus Christi pipeline, a 23-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was founded in 1983 and is headquartered in Houston, Texas.

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