Northwest Natural Gas (NYSE: NWN) and Spire (NYSE:SR) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.
Earnings & Valuation
This table compares Northwest Natural Gas and Spire’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Northwest Natural Gas||$754.82 million||2.44||$257.76 million||$2.21||29.10|
|Spire||$1.76 billion||2.06||$462.00 million||$3.49||21.50|
Spire has higher revenue and earnings than Northwest Natural Gas. Spire is trading at a lower price-to-earnings ratio than Northwest Natural Gas, indicating that it is currently the more affordable of the two stocks.
This table compares Northwest Natural Gas and Spire’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Northwest Natural Gas||8.38%||7.51%||2.08%|
Institutional & Insider Ownership
63.6% of Northwest Natural Gas shares are held by institutional investors. Comparatively, 74.7% of Spire shares are held by institutional investors. 1.5% of Northwest Natural Gas shares are held by company insiders. Comparatively, 3.1% of Spire shares are held 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.
Risk & Volatility
Northwest Natural Gas has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Spire has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.
Northwest Natural Gas pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Spire pays an annual dividend of $2.10 per share and has a dividend yield of 2.8%. Northwest Natural Gas pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spire pays out 60.2% of its earnings in the form of a dividend. Northwest Natural Gas has raised its dividend for 61 consecutive years. Northwest Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current ratings and price targets for Northwest Natural Gas and Spire, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Northwest Natural Gas||0||2||1||0||2.33|
Northwest Natural Gas currently has a consensus price target of $75.00, suggesting a potential upside of 16.64%. Spire has a consensus price target of $70.50, suggesting a potential downside of 6.06%. Given Northwest Natural Gas’ stronger consensus rating and higher probable upside, equities analysts plainly believe Northwest Natural Gas is more favorable than Spire.
Spire beats Northwest Natural Gas on 9 of the 16 factors compared between the two stocks.
About Northwest Natural Gas
Northwest Natural Gas Company (NW Natural) is engaged in the distribution of natural gas. The Company’s segments include Local Gas Distribution, Gas Storage and other. The Company maintains operations in Oregon, Washington and California and conducts businesses through NW Natural and its subsidiaries. The local gas distribution business, referred to as the utility segment, serves residential, commercial, and industrial customers in Oregon and southwest Washington. The Company’s gas storage business, referred to as the gas storage segment, provides storage services for utilities, gas marketers, electric generators and industrial users from storage facilities located in Oregon and California. The Company’s other segment is referred to as non-utility and consists of non-utility investments and other business activities. The other segment consists of an equity method investment in Trail West Holdings, LLC (TWH) and other pipeline assets in NNG Financial Corporation.
Spire Inc., formerly The Laclede Group, Inc., is engaged to transform its business and pursue growth by growing its gas utility business through prudent investment in infrastructure upgrades and organic growth initiatives; acquire and integrate gas utilities; modernize its gas assets, and invest in innovation. The Company has two business segments, which include gas utility and gas marketing. The gas utility segment includes the regulated operations of Laclede Gas Company (Laclede Gas), Alabama Gas Corporation (Alagasco) and EnergySouth, Inc. (EnergySouth). The gas marketing segment includes Laclede Energy Resources, Inc. (LER), a subsidiary engaged in the marketing of natural gas and related activities on a non-regulated basis. Laclede Gas is engaged in the purchase, retail distribution and sale of natural gas, serving residential, commercial and industrial customers, through Missouri Gas Energy (MGE), Kansas City and western Missouri.
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