WGL Holdings (NYSE: WGL) and National Fuel Gas (NYSE:NFG) are both mid-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Insider and Institutional Ownership

69.1% of WGL Holdings shares are owned by institutional investors. Comparatively, 71.8% of National Fuel Gas shares are owned by institutional investors. 1.1% of WGL Holdings shares are owned by company insiders. Comparatively, 2.6% of National Fuel Gas 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.

Dividends

WGL Holdings pays an annual dividend of $2.04 per share and has a dividend yield of 2.4%. National Fuel Gas pays an annual dividend of $1.66 per share and has a dividend yield of 2.8%. WGL Holdings pays out 58.1% of its earnings in the form of a dividend. National Fuel Gas pays out 51.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. WGL Holdings has raised its dividend for 46 consecutive years and National Fuel Gas has raised its dividend for 40 consecutive years. National Fuel Gas is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
WGL Holdings 7.60% 11.76% 2.73%
National Fuel Gas 17.38% 18.31% 5.13%

Analyst Ratings

This is a breakdown of current recommendations and price targets for WGL Holdings and National Fuel Gas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WGL Holdings 0 4 0 0 2.00
National Fuel Gas 0 3 0 0 2.00

WGL Holdings presently has a consensus target price of $71.00, indicating a potential downside of 15.76%. National Fuel Gas has a consensus target price of $57.00, indicating a potential downside of 4.20%. Given National Fuel Gas’ higher possible upside, analysts clearly believe National Fuel Gas is more favorable than WGL Holdings.

Volatility and Risk

WGL Holdings has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, National Fuel Gas has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Valuation and Earnings

This table compares WGL Holdings and National Fuel Gas’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
WGL Holdings $2.39 billion 1.81 $465.84 million $3.51 24.01
National Fuel Gas $1.59 billion 3.20 $804.38 million $3.21 18.54

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

Summary

National Fuel Gas beats WGL Holdings on 11 of the 15 factors compared between the two stocks.

WGL Holdings Company Profile

WGL Holdings, Inc. (WGL) is a holding company. The Company operates through four segments. The Regulated Utility segment consists of Washington Gas Light Company, which provides regulated gas distribution services to end use customers and natural gas transportation services to an unaffiliated natural gas distribution company and Hampshire Gas Company, which provides regulated interstate natural gas storage services. The Retail Energy-Marketing segment consists of the operations of WGL Energy Services, Inc., which sells natural gas and electricity directly to retail customers. The Commercial Energy Systems segment consists of the operations of WGL Energy Systems, Inc., WGSW, Inc. and the results of operations of affiliate-owned commercial distributed energy projects. The Midstream Energy Services segment consists of the operations of WGL Midstream, Inc., which engages in acquiring, investing in, managing and optimizing natural gas storage and transportation assets.

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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