UGI Corporation (NYSE: UGI) and Delta Natural Gas (NASDAQ:DGAS) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Institutional & Insider Ownership

78.4% of UGI Corporation shares are owned by institutional investors. Comparatively, 36.4% of Delta Natural Gas shares are owned by institutional investors. 2.2% of UGI Corporation shares are owned by insiders. Comparatively, 4.2% of Delta Natural Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

UGI Corporation has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Delta Natural Gas has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Valuation & Earnings

This table compares UGI Corporation and Delta Natural Gas’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
UGI Corporation $5.98 billion 1.40 $1.35 billion $2.18 22.13
Delta Natural Gas $67.09 million 3.25 $20.21 million $0.89 34.34

UGI Corporation has higher revenue and earnings than Delta Natural Gas. UGI Corporation 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.

Dividends

UGI Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Delta Natural Gas pays an annual dividend of $0.83 per share and has a dividend yield of 2.7%. UGI Corporation pays out 45.9% of its earnings in the form of a dividend. Delta Natural Gas pays out 93.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Delta Natural Gas has raised its dividend for 31 consecutive years. Delta Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings for UGI Corporation and Delta Natural Gas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UGI Corporation 1 1 1 0 2.00
Delta Natural Gas 0 0 0 0 N/A

UGI Corporation currently has a consensus target price of $46.00, indicating a potential downside of 4.64%. Given UGI Corporation’s higher possible upside, equities analysts plainly believe UGI Corporation is more favorable than Delta Natural Gas.

Profitability

This table compares UGI Corporation and Delta Natural Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UGI Corporation 6.48% 10.44% 3.54%
Delta Natural Gas 9.35% 8.08% 3.31%

Summary

UGI Corporation beats Delta Natural Gas on 10 of the 16 factors compared between the two stocks.

UGI Corporation Company Profile

UGI Corporation is a holding company. The Company distributes, stores, transports and markets energy products and related services. It operates through six segments. The AmeriGas Propane segment consists of the propane distribution business of AmeriGas Partners, L.P. The UGI France segment consists of the French LPG distribution business of its subsidiaries, Antargaz, Finagaz and its liquefied petroleum gases (LPG) distribution businesses. The Flaga & Other segment consists of the LPG distribution businesses of Flaga GmbH, AvantiGas Limited and ChinaGas Partners, L.P. The Energy Services segment consists of energy-related businesses conducted by its subsidiary, UGI Energy Services, LLC (Energy Services). The Electric Generation segment consists of electric generation facilities conducted by Energy Services’ subsidiary. The Gas Utility segment consists of the regulated natural gas distribution businesses of its subsidiary, UGI Utilities, Inc.

Delta Natural Gas Company Profile

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.

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