Critical Comparison: National Fuel Gas (NYSE:NFG) and NewJersey Resources (NYSE:NJR)

National Fuel Gas (NYSE:NFG) and NewJersey Resources (NYSE:NJR) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Dividends

National Fuel Gas pays an annual dividend of $2.22 per share and has a dividend yield of 3.0%. NewJersey Resources pays an annual dividend of $2.00 per share and has a dividend yield of 3.7%. National Fuel Gas pays out 31.5% of its earnings in the form of a dividend. NewJersey Resources pays out 55.2% 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. National Fuel Gas has raised its dividend for 55 consecutive years and NewJersey Resources has raised its dividend for 29 consecutive years.

Insider and Institutional Ownership

74.0% of National Fuel Gas shares are owned by institutional investors. Comparatively, 71.0% of NewJersey Resources shares are owned by institutional investors. 1.3% of National Fuel Gas shares are owned by insiders. Comparatively, 0.7% of NewJersey Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares National Fuel Gas and NewJersey Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Fuel Gas	$2.52 billion	2.84	$665.44 million	$7.04	10.68
NewJersey Resources	$2.04 billion	2.72	$335.63 million	$3.62	15.05

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

Profitability

This table compares National Fuel Gas and NewJersey Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Fuel Gas	26.46%	17.95%	6.91%
NewJersey Resources	16.42%	14.46%	4.67%

Risk and Volatility

National Fuel Gas has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, NewJersey Resources has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for National Fuel Gas and NewJersey Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Fuel Gas	0	1	2	0	2.67
NewJersey Resources	0	2	4	1	2.86

National Fuel Gas presently has a consensus target price of $96.00, indicating a potential upside of 27.72%. NewJersey Resources has a consensus target price of $62.50, indicating a potential upside of 14.70%. Given National Fuel Gas’ higher possible upside, analysts plainly believe National Fuel Gas is more favorable than NewJersey Resources.

Summary

National Fuel Gas beats NewJersey Resources on 12 of the 18 factors compared between the two stocks.

About National Fuel Gas

National Fuel Gas Company is a diversified natural gas business founded in 1902 and headquartered in Williamsville, New York. Its operations span natural gas production, gathering and transportation, storage, and local distribution. Through Seneca Resources, the company explores for and produces natural gas, primarily in the Appalachian region. Its pipeline and storage businesses gather, transport, and store natural gas, connecting production areas with markets and other pipeline systems. National Fuel Gas also distributes natural gas to homes and businesses in western New York and northwestern Pennsylvania.

About NewJersey Resources

New Jersey Resources Corporation is an energy services holding company headquartered in Wall, New Jersey. Through its subsidiaries, it distributes natural gas, provides energy-related services, and develops and operates clean energy and infrastructure assets. Its utility subsidiary, New Jersey Natural Gas, delivers natural gas to residential, commercial, and industrial customers in New Jersey. The company also provides natural gas supply and energy management services, operates natural gas storage and transportation assets, and offers home services such as heating, cooling, plumbing, and appliance repair.