NewJersey Resources (NYSE:NJR) vs. RGC Resources (NASDAQ:RGCO) Head-To-Head Survey

NewJersey Resources (NYSE:NJR) and RGC Resources (NASDAQ:RGCO) are both utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Profitability

This table compares NewJersey Resources and RGC Resources’ 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%
RGC Resources	13.05%	11.73%	4.15%

Insider & Institutional Ownership

71.0% of NewJersey Resources shares are held by institutional investors. Comparatively, 35.8% of RGC Resources shares are held by institutional investors. 0.7% of NewJersey Resources shares are held by company insiders. Comparatively, 7.2% of RGC Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

NewJersey Resources has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, RGC Resources has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.

Dividends

NewJersey Resources pays an annual dividend of $1.90 per share and has a dividend yield of 3.5%. RGC Resources pays an annual dividend of $0.87 per share and has a dividend yield of 4.0%. NewJersey Resources pays out 52.5% of its earnings in the form of a dividend. RGC Resources pays out 64.9% 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 RGC Resources has increased its dividend for 22 consecutive years.

Valuation and Earnings

This table compares NewJersey Resources and RGC Resources”s top-line 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	2.67	$335.63 million	$3.62	14.80
RGC Resources	$95.33 million	2.35	$13.28 million	$1.34	16.04

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

Analyst Recommendations

This is a summary of recent recommendations for NewJersey Resources and RGC Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewJersey Resources	0	1	5	1	3.00
RGC Resources	0	0	2	0	3.00

NewJersey Resources presently has a consensus price target of $61.50, indicating a potential upside of 14.82%. RGC Resources has a consensus price target of $27.00, indicating a potential upside of 25.64%. Given RGC Resources’ higher probable upside, analysts plainly believe RGC Resources is more favorable than NewJersey Resources.

Summary

NewJersey Resources beats RGC Resources on 12 of the 17 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 RGC Resources

RGC Resources, Inc., through its subsidiaries, operates as an energy services company. It sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. The company also provides various unregulated services. It operates approximately 1,179 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility, as well as owns and operates six metering stations. In addition, it produces biogas. RGC Resources, Inc. was founded in 1883 and is based in Roanoke, Virginia.