Critical Comparison: Spire (NYSE:SR) & Snam (OTCMKTS:SNMRY)

Snam (OTCMKTS:SNMRY) and Spire (NYSE:SR) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Institutional and Insider Ownership

0.0% of Snam shares are held by institutional investors. Comparatively, 87.4% of Spire shares are held by institutional investors. 2.3% of Spire shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Snam and Spire, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Snam	0	3	0	1	2.50
Spire	0	5	5	2	2.75

Spire has a consensus price target of $94.00, suggesting a potential upside of 14.09%. Given Spire’s stronger consensus rating and higher possible upside, analysts plainly believe Spire is more favorable than Snam.

Dividends

Snam pays an annual dividend of $0.46 per share and has a dividend yield of 3.4%. Spire pays an annual dividend of $3.30 per share and has a dividend yield of 4.0%. Snam pays out 70.3% 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. Spire has increased its dividend for 22 consecutive years. Spire is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Snam and Spire”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Snam	N/A	N/A	N/A	$0.65	20.68
Spire	$2.67 billion	1.83	$271.70 million	$8.97	9.19

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Snam	N/A	N/A	N/A
Spire	21.48%	8.65%	2.21%

Summary

Spire beats Snam on 14 of the 15 factors compared between the two stocks.

About Snam

Snam S.p.A., together with its subsidiaries, engages in the operation of natural gas transport and storage infrastructure. The company operates through Transportation, Storage, Regasification, Energy Transition, and other segments. It provides natural gas transportation and dispatching services; and owns and manages liquified natural gas (LNG) regasification plants. The company also offers natural gas storage services through an integrated group of infrastructure comprising deposits, wells, gas treatment and compression plants, and the operational dispatching systems; and operates storage concessions located in Lombardy, Emilia-Romagna, and Abruzzo. In addition, it provides energy efficiency solutions for companies, condominiums, tertiary, and public administration sectors; and invests, constructs, develops, and operates biogas and biomethane plants. Further, the company offers engineering support and consulting services in technical and specialized fields; and sells automotive compressed natural gas (CNG) compressors. It operates a natural gas transportation network of approximately 38,000 kilometers in Italy, Austria, Tunisia, Egypt, the United Arab Emirates, France, Greece, and the United Kingdom. The company was formerly known as Snam Rete Gas S.p.A. and changed its name to Snam S.p.A. in January 2012. Snam S.p.A. was founded in 1941 and is headquartered in San Donato Milanese, Italy.

About Spire

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.