Critical Review: Italgas (OTCMKTS:ITGGF) versus Black Hills (NYSE:BKH)

Italgas (OTCMKTS:ITGGF) and Black Hills (NYSE:BKH) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Italgas and Black Hills, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Italgas	1	0	0	0	1.00
Black Hills	1	4	0	0	1.80

Black Hills has a consensus price target of $55.00, suggesting a potential upside of 0.22%. Given Black Hills’ stronger consensus rating and higher probable upside, analysts plainly believe Black Hills is more favorable than Italgas.

Valuation and Earnings

This table compares Italgas and Black Hills’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Italgas	N/A	N/A	N/A	N/A	N/A
Black Hills	$2.33 billion	1.61	$262.20 million	$3.92	14.00

Black Hills has higher revenue and earnings than Italgas.

Institutional and Insider Ownership

86.7% of Black Hills shares are owned by institutional investors. 0.6% of Black Hills shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Italgas and Black Hills’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Italgas	N/A	N/A	N/A
Black Hills	11.25%	8.09%	2.73%

Summary

Black Hills beats Italgas on 8 of the 8 factors compared between the two stocks.

About Italgas

Italgas S.p.A., together with its subsidiaries, engages in the distribution of natural gas in Italy. It is involved in the transportation of gas to households, enterprises, etc. The company operated a distribution network of 81,309 kilometers. It also engages in metering activities; and distributes and sells water. Italgas S.p.A. was founded in 1837 and is based in Milan, Italy.

About Black Hills

Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States. The company operates in two segments: Electric Utilities and Gas Utilities. The Electric Utilities segment generates, transmits, and distributes electricity to approximately 222,000 electric utility customers in Colorado, Montana, South Dakota, and Wyoming; and owns and operates 1,394 megawatts of generation capacity and 9,106 miles of electric transmission and distribution lines. The Gas Utilities segment distributes natural gas to approximately 1,116,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming; owns and operates 4,663 miles of intrastate gas transmission pipelines; 42,514 miles of gas distribution mains and service lines; seven natural gas storage sites; and approximately 50,000 horsepower of compression and 516 miles of gathering lines. It also constructs and maintains customer owned gas infrastructure facilities for gas transportation customers; and provides appliance repair services to residential utility customers, as well as electrical system construction services to large industrial customers. In addition, the company produces electric power through wind, natural gas, and coal-fired generating plants; and coal at its coal mine located near Gillette, Wyoming. Black Hills Corporation was incorporated in 1941 and is headquartered in Rapid City, South Dakota.