Critical Analysis: Delta Natural Gas (DGAS) vs. Southern Union (SUG)
Delta Natural Gas (NASDAQ: DGAS) and Southern Union (NYSE:SUG) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.
Delta Natural Gas pays an annual dividend of $0.75 per share and has a dividend yield of 2.4%. Southern Union does not pay a dividend. Delta Natural Gas pays out 97.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
36.8% of Delta Natural Gas shares are held by institutional investors. 4.2% of Delta Natural Gas 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.
This is a summary of recent ratings and target prices for Delta Natural Gas and Southern Union, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Delta Natural Gas||0||0||0||0||N/A|
This table compares Delta Natural Gas and Southern Union’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Delta Natural Gas||-3.88%||-2.51%||-1.03%|
Earnings and Valuation
This table compares Delta Natural Gas and Southern Union’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Delta Natural Gas||N/A||N/A||N/A||$0.77||39.86|
Southern Union is trading at a lower price-to-earnings ratio than Delta Natural Gas, indicating that it is currently the more affordable of the two stocks.
Southern Union beats Delta Natural Gas on 5 of the 8 factors compared between the two stocks.
About Delta Natural Gas
Delta Natural Gas Company, Inc. distributes or transports natural gas to approximately 36,000 customers. The Company’s segments include regulated segment and non-regulated segment. Through regulated segment, the Company distributes natural gas to its retail customers in approximately 23 rural counties. Its three service areas are Nicholasville, Corbin and Berea, Kentucky. The non-regulated segment includes the Company’s three subsidiaries, Delta Resources, Inc. and Delgasco, Inc. (Delgasco), which purchase natural gas in the open market, including natural gas from Kentucky producers, and Enpro, Inc. (Enpro), which produces natural gas that is sold to Delgasco for resale in the open market. The Company owns approximately 2,600 miles of natural gas gathering, transmission, distribution and storage lines. These lines range in size over 12 inches in diameter. It also holds leases for the storage of natural gas under approximately 8,000 acres located in Bell County, Kentucky.
About Southern Union
Southern Union Company (Southern Union) is engaged in the gathering, processing, transportation, storage and distribution of natural gas in the United States. The Company owns and operates assets in the regulated and unregulated natural gas industry. Southern Union operates in three segments: Transportation and Storage, which is engaged in the interstate transportation and storage of natural gas and provides liquefied natural gas (LNG) terminalling and re-gasification services; Gathering and Processing, which is engaged in the gathering, treating, processing and redelivery of natural gas and natural gas liquid (NGL) in Texas and New Mexico, and Distribution, which is engaged in the local distribution of natural gas in Missouri. Effective December 20, 2013, Algonquin Power & Utilities Corp. (APUC) announced that, Liberty Utilities, APUC’s regulated distribution utility, acquired the Massachusetts natural gas distribution utility assets (New England Gas Assets) of Southern Union Company.
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