Atmos Energy (NYSE:ATO) versus Northwest Natural Gas (NYSE:NWN) Head-To-Head Comparison

Northwest Natural Gas (NYSE:NWN) and Atmos Energy (NYSE:ATO) 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.

Dividends

Northwest Natural Gas pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. Atmos Energy pays an annual dividend of $4.36 per share and has a dividend yield of 2.5%. Northwest Natural Gas pays out 66.2% of its earnings in the form of a dividend. Atmos Energy pays out 51.2% 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. Northwest Natural Gas has raised its dividend for 70 consecutive years and Atmos Energy has raised its dividend for 41 consecutive years. Northwest Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Northwest Natural Gas and Atmos Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northwest Natural Gas	9.65%	8.23%	1.97%
Atmos Energy	28.50%	9.63%	4.66%

Earnings & Valuation

This table compares Northwest Natural Gas and Atmos Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northwest Natural Gas	$1.29 billion	1.69	$113.32 million	$3.02	17.13
Atmos Energy	$4.92 billion	6.04	$1.43 billion	$8.51	20.66

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

Risk & Volatility

Northwest Natural Gas has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Atmos Energy has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Northwest Natural Gas and Atmos Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northwest Natural Gas	0	5	3	2	2.70
Atmos Energy	0	10	3	0	2.23

Northwest Natural Gas presently has a consensus target price of $55.43, suggesting a potential upside of 7.13%. Atmos Energy has a consensus target price of $183.36, suggesting a potential upside of 4.31%. Given Northwest Natural Gas’ stronger consensus rating and higher possible upside, analysts plainly believe Northwest Natural Gas is more favorable than Atmos Energy.

Insider and Institutional Ownership

75.1% of Northwest Natural Gas shares are held by institutional investors. Comparatively, 90.2% of Atmos Energy shares are held by institutional investors. 0.6% of Northwest Natural Gas shares are held by company insiders. Comparatively, 0.4% of Atmos Energy 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.

Summary

Atmos Energy beats Northwest Natural Gas on 11 of the 17 factors compared between the two stocks.

About Northwest Natural Gas

Northwest Natural Gas, now organized as NW Natural Holdings, is a utility company whose principal business is the distribution of natural gas through its NW Natural subsidiary. The company serves residential, commercial and industrial customers in Oregon and southwest Washington. Founded in 1859 as the Portland Gas Light Company, the business has grown from a local gas provider into a regional utility. Its operations also include natural gas storage and, through subsidiaries, water and wastewater services.

About Atmos Energy

Atmos Energy Corporation is a regulated natural gas utility and pipeline operator headquartered in Dallas, Texas. The company distributes natural gas to residential, commercial and industrial customers and operates natural gas transmission and storage assets. Its regulated distribution business serves customers in eight states: Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, Texas and Virginia. Through its pipeline and storage operations, Atmos Energy moves and stores natural gas, primarily in Texas, Louisiana and Mississippi.