Northwest Natural Gas (NYSE: NWN) and JP Energy Partners (NYSE:JPEP) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Northwest Natural Gas and JP Energy Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Natural Gas 0 2 1 0 2.33
JP Energy Partners 0 0 1 0 3.00

Northwest Natural Gas presently has a consensus price target of $75.00, suggesting a potential upside of 15.47%. JP Energy Partners has a consensus price target of $11.00, suggesting a potential upside of 16.53%. Given JP Energy Partners’ stronger consensus rating and higher probable upside, analysts clearly believe JP Energy Partners is more favorable than Northwest Natural Gas.

Dividends

Northwest Natural Gas pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. JP Energy Partners pays an annual dividend of $1.30 per share and has a dividend yield of 13.8%. Northwest Natural Gas pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. JP Energy Partners pays out -81.8% of its earnings in the form of a dividend. JP Energy Partners has raised its dividend for 61 consecutive years. JP Energy Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Northwest Natural Gas has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, JP Energy Partners has a beta of 3.3, indicating that its share price is 230% more volatile than the S&P 500.

Earnings & Valuation

This table compares Northwest Natural Gas and JP Energy Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Northwest Natural Gas $754.82 million 2.47 $257.76 million $2.21 29.39
JP Energy Partners N/A N/A N/A ($1.59) -5.94

Northwest Natural Gas has higher revenue and earnings than JP Energy Partners. JP Energy Partners is trading at a lower price-to-earnings ratio than Northwest Natural Gas, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Northwest Natural Gas and JP Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Natural Gas 8.38% 7.51% 2.08%
JP Energy Partners -5.61% -5.99% -4.01%

Insider and Institutional Ownership

63.3% of Northwest Natural Gas shares are owned by institutional investors. Comparatively, 53.4% of JP Energy Partners shares are owned by institutional investors. 1.5% of Northwest Natural Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Northwest Natural Gas beats JP Energy Partners on 7 of the 13 factors compared between the two stocks.

About Northwest Natural Gas

Northwest Natural Gas Company (NW Natural) is engaged in the distribution of natural gas. The Company’s segments include Local Gas Distribution, Gas Storage and other. The Company maintains operations in Oregon, Washington and California and conducts businesses through NW Natural and its subsidiaries. The local gas distribution business, referred to as the utility segment, serves residential, commercial, and industrial customers in Oregon and southwest Washington. The Company’s gas storage business, referred to as the gas storage segment, provides storage services for utilities, gas marketers, electric generators and industrial users from storage facilities located in Oregon and California. The Company’s other segment is referred to as non-utility and consists of non-utility investments and other business activities. The other segment consists of an equity method investment in Trail West Holdings, LLC (TWH) and other pipeline assets in NNG Financial Corporation.

About JP Energy Partners

JP Energy Partners LP owns, operates, develops and acquires a portfolio of midstream energy assets. The Company provides midstream infrastructure solutions for the supply of crude oil, refined products and natural gas liquids (NGLs) in the United States. The Company’s segments include crude oil pipelines and storage, refined products terminals and storage, and NGL distribution and sales. The Company’s crude oil businesses are situated in areas, including the Permian Basin and Eagle Ford shale. Its crude oil pipelines and storage segment manages the physical movement of crude oil from origination to final destination through its network of owned and leased assets. Its refined product terminals and storage segment consists of approximately two refined products terminals located in North Little Rock, Arkansas and Caddo Mills, Texas. The Company’s NGL distribution and sales segment involves the retail, commercial and wholesale sale of NGLs and other refined products.

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