RGC Resources (NASDAQ:RGCO) vs. Spire (NYSE:SR) Head-To-Head Contrast

RGC Resources (NASDAQ:RGCO – Get Free Report) and Spire (NYSE:SR – Get Free Report) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings for RGC Resources and Spire, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RGC Resources 0 0 2 0 3.00
Spire 0 6 7 1 2.64

RGC Resources presently has a consensus target price of $27.00, indicating a potential upside of 27.69%. Spire has a consensus target price of $92.50, indicating a potential upside of 22.04%. Given RGC Resources’ stronger consensus rating and higher possible upside, analysts clearly believe RGC Resources is more favorable than Spire.

Volatility & Risk

RGC Resources has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Spire has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Dividends

RGC Resources pays an annual dividend of $0.87 per share and has a dividend yield of 4.1%. Spire pays an annual dividend of $3.30 per share and has a dividend yield of 4.4%. RGC Resources pays out 64.9% of its earnings in the form of a dividend. Spire pays out 36.8% 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. RGC Resources has raised its dividend for 22 consecutive years and Spire has raised its dividend for 22 consecutive years. Spire is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares RGC Resources and Spire”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RGC Resources $95.33 million 2.31 $13.28 million $1.34 15.78
Spire $2.48 billion 1.81 $271.70 million $8.97 8.45

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

Institutional and Insider Ownership

35.8% of RGC Resources shares are owned by institutional investors. Comparatively, 87.4% of Spire shares are owned by institutional investors. 7.2% of RGC Resources shares are owned by company insiders. Comparatively, 2.3% of Spire shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares RGC Resources and Spire’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RGC Resources 13.05% 11.73% 4.15%
Spire 21.48% 8.65% 2.21%

Summary

Spire beats RGC Resources on 10 of the 17 factors compared between the two stocks.

About RGC Resources

(Get Free Report)

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.

About Spire

(Get Free Report)

Spire Inc., together with its subsidiaries, engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates through three segments: Gas Utility, Gas Marketing, and Midstream. It is also involved in the marketing of natural gas and related services; and transportation and storage of natural gas. In addition, the company engages in the operation of propane through its propane pipeline, risk management, and other activities. The company was formerly known as The Laclede Group, Inc. and changed its name to Spire Inc. in April 2016. Spire Inc. was founded in 1857 and is based in Saint Louis, Missouri.

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