Head-To-Head Comparison: Naturgy Energy Group (OTCMKTS:GASNY) versus Southwest Gas (NYSE:SWX)

Southwest Gas (NYSE:SWX) and Naturgy Energy Group (OTCMKTS:GASNY) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Southwest Gas and Naturgy Energy Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southwest Gas	31.85%	6.91%	2.64%
Naturgy Energy Group	N/A	N/A	N/A

Insider and Institutional Ownership

92.8% of Southwest Gas shares are held by institutional investors. Comparatively, 0.0% of Naturgy Energy Group shares are held by institutional investors. 0.6% of Southwest Gas shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations for Southwest Gas and Naturgy Energy Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southwest Gas	0	1	6	1	3.00
Naturgy Energy Group	0	0	3	1	3.25

Southwest Gas presently has a consensus target price of $98.29, suggesting a potential upside of 6.51%. Given Southwest Gas’ higher possible upside, analysts plainly believe Southwest Gas is more favorable than Naturgy Energy Group.

Earnings and Valuation

This table compares Southwest Gas and Naturgy Energy Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southwest Gas	$1.74 billion	3.84	$439.83 million	$7.66	12.05
Naturgy Energy Group	N/A	N/A	N/A	$0.31	21.18

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

Dividends

Southwest Gas pays an annual dividend of $2.58 per share and has a dividend yield of 2.8%. Naturgy Energy Group pays an annual dividend of $0.33 per share and has a dividend yield of 5.0%. Southwest Gas pays out 33.7% of its earnings in the form of a dividend. Naturgy Energy Group pays out 105.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Southwest Gas beats Naturgy Energy Group on 10 of the 13 factors compared between the two stocks.

About Southwest Gas

Southwest Gas Holdings, Inc., through its subsidiaries, distributes and transports natural gas in Arizona, Nevada, and California. The company operates through Natural Gas Distribution, Utility Infrastructure Services, and Pipeline and Storage segments. It also provides trenching, installation, and replacement of underground pipes, as well as maintenance services for energy distribution systems. As of December 31, 2023, it had 2,226,000 residential, commercial, industrial, and other natural gas customers. Southwest Gas Holdings, Inc. was incorporated in 1931 and is headquartered in Las Vegas, Nevada.

About Naturgy Energy Group

Naturgy Energy Group, S.A., together with its subsidiaries, engages in the supply, liquefaction, regasification, transport, storage, distribution, and sale of natural gas. It operates through Distribution Networks and Energy Markets segments. The company engages in the regulated gas and electricity distribution; sale of liquefied natural gas and the maritime transport business; management conventional thermal generation facilities; and generation and sale of electricity through wind, mini-hydro, solar, and cogeneration sources, as well as provision of supply management services. It serves in Spain, Australia, the United States, Argentina, Brazil, Chile, Mexico, Panama, the rest of Latin America, and internationally. The company was formerly known as Gas Natural SDG, S.A. and changed its name to Naturgy Energy Group, S.A. in June 2018. Naturgy Energy Group, S.A. was incorporated in 1843 and is based in Madrid, Spain.