Piedmont Natural Gas (NYSE: PNY) and National Fuel Gas (NYSE:NFG) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitabiliy, valuation and risk.

Risk & Volatility

Piedmont Natural Gas has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, National Fuel Gas has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.

Valuation and Earnings

This table compares Piedmont Natural Gas and National Fuel Gas’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Piedmont Natural Gas N/A N/A N/A $1.72 34.90
National Fuel Gas $1.57 billion 3.19 $812.03 million $3.21 18.27

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

Profitability

This table compares Piedmont Natural Gas and National Fuel Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piedmont Natural Gas 19.00% 22.34% 6.57%
National Fuel Gas 17.38% 18.31% 5.13%

Dividends

Piedmont Natural Gas pays an annual dividend of $1.36 per share and has a dividend yield of 2.3%. National Fuel Gas pays an annual dividend of $1.66 per share and has a dividend yield of 2.8%. Piedmont Natural Gas pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Fuel Gas pays out 51.7% of its earnings in the form of a dividend. Piedmont Natural Gas has raised its dividend for 46 consecutive years and National Fuel Gas has raised its dividend for 38 consecutive years. National Fuel Gas is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

61.5% of Piedmont Natural Gas shares are held by institutional investors. Comparatively, 69.0% of National Fuel Gas shares are held by institutional investors. 1.4% of Piedmont Natural Gas shares are held by insiders. Comparatively, 2.6% of National Fuel Gas shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Piedmont Natural Gas and National Fuel Gas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piedmont Natural Gas 0 0 0 0 N/A
National Fuel Gas 0 4 0 0 2.00

National Fuel Gas has a consensus price target of $57.00, indicating a potential downside of 2.83%. Given National Fuel Gas’ higher possible upside, analysts clearly believe National Fuel Gas is more favorable than Piedmont Natural Gas.

Summary

National Fuel Gas beats Piedmont Natural Gas on 8 of the 12 factors compared between the two stocks.

Piedmont Natural Gas Company Profile

Piedmont Natural Gas Company, Inc. is an energy services company. The Company’s principal business is the distribution of natural gas to residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities, which are its wholesale customers. The Company operates through three segments: regulated utility, regulated non-utility activities and unregulated non-utility activities. The regulated utility segment includes operating a natural gas distribution system. The regulated non-utility activities segment consists of its equity method investments in regulated energy-related joint ventures that are held by its subsidiaries. The unregulated non-utility activities segment consists primarily of its equity method investment in an unregulated energy-related joint venture that is held by its subsidiary.

National Fuel Gas Company Profile

National Fuel Gas Company is a holding company. The Company is an energy company engaged principally in the production, gathering, transportation, distribution and marketing of natural gas. The Company operates in five business segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. The Company operates an integrated business, with assets centered in western New York and Pennsylvania, and the production and transportation of natural gas from the Marcellus Shale basin. The Company also develops and produces oil reserves, primarily in California. The Company’s Exploration and Production segment operations are carried out by Seneca Resources Corporation (Seneca), a Pennsylvania corporation. The Company’s National Fuel Gas Supply Corporation (Supply Corporation), a Pennsylvania corporation, and Empire Pipeline, Inc. (Empire), a New York corporation, carry out the Company’s Pipeline and Storage segment operations.

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