NewJersey Resources (NYSE:NJR) and National Fuel Gas (NYSE:NFG) Critical Contrast

NewJersey Resources (NYSE:NJR) and National Fuel Gas (NYSE:NFG) are both mid-cap 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 NewJersey Resources and National Fuel Gas, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewJersey Resources	0	2	4	1	2.86
National Fuel Gas	0	1	2	0	2.67

NewJersey Resources presently has a consensus price target of $62.50, suggesting a potential upside of 16.00%. National Fuel Gas has a consensus price target of $105.50, suggesting a potential upside of 35.99%. Given National Fuel Gas’ higher probable upside, analysts plainly believe National Fuel Gas is more favorable than NewJersey Resources.

Earnings & Valuation

This table compares NewJersey Resources and National Fuel Gas”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewJersey Resources	$2.04 billion	2.68	$335.63 million	$3.62	14.88
National Fuel Gas	$2.28 billion	3.24	$518.50 million	$7.20	10.78

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

Dividends

NewJersey Resources pays an annual dividend of $2.00 per share and has a dividend yield of 3.7%. National Fuel Gas pays an annual dividend of $2.22 per share and has a dividend yield of 2.9%. NewJersey Resources pays out 55.2% of its earnings in the form of a dividend. National Fuel Gas pays out 30.8% 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. NewJersey Resources has increased its dividend for 29 consecutive years and National Fuel Gas has increased its dividend for 55 consecutive years.

Risk & Volatility

NewJersey Resources has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, National Fuel Gas has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NewJersey Resources	16.42%	14.46%	4.67%
National Fuel Gas	26.97%	19.04%	7.33%

Institutional and Insider Ownership

71.0% of NewJersey Resources shares are owned by institutional investors. Comparatively, 74.0% of National Fuel Gas shares are owned by institutional investors. 0.7% of NewJersey Resources shares are owned by company insiders. Comparatively, 1.3% of National Fuel Gas shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

National Fuel Gas beats NewJersey Resources on 12 of the 18 factors compared between the two stocks.

About NewJersey Resources

New Jersey Resources Corporation, an energy services holding company, distributes natural gas. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation. The Natural Gas Distribution segment offers regulated natural gas utility services to approximately 576,000 customers in Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey; provides capacity and storage management services; and participates in the off-system sales and capacity release markets. The Clean Energy Ventures segment invests in, owns, and operates clean energy projects, including commercial and residential solar installation situated in New Jersey, Rhode Island, New York, Connecticut, Michigan, and Indiana. The Energy Services segment maintains and operates natural gas transportation and storage capacity contracts, as well as provides physical wholesale energy, retail energy and energy management services in the United States and Canada. The Storage and Transportation segment invests in invests in energy-related ventures. It provides heating, ventilation, and cooling services; sales and installation of appliances; offers solar equipment installation, and plumbing repair and installation services; and holds commercial real estate properties. The company was incorporated in 1981 and is headquartered in Wall, New Jersey.

About National Fuel Gas

National Fuel Gas Company operates as a diversified energy company. It operates through four segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. The Exploration and Production segment explores for, develops, and produces natural gas and oil. The Pipeline and Storage segment provides interstate natural gas transportation services through an integrated gas pipeline system in Pennsylvania and New York; and owns and operates underground natural gas storage fields. This segment also transports natural gas for National Fuel Gas Distribution Corporation, as well as for other utilities, industrial companies, and power producers in New York State. The Gathering segment builds, owns, and operates natural gas processing and pipeline gathering facilities in the Appalachian region, as well as provides gathering services to Seneca. The Utility segment sells natural gas or provides natural gas utility services to various customers in Buffalo, Niagara Falls, and Jamestown, New York; and Erie and Sharon, Pennsylvania. National Fuel Gas Company was incorporated in 1902 and is headquartered in Williamsville, New York.