Contrasting Southern Company Gas (GAS) and South Jersey Industries (SJI)

South Jersey Industries (NYSE: SJI) and Southern Company Gas (NYSE:GAS) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Volatility and Risk

South Jersey Industries has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Southern Company Gas has a beta of -0.08, meaning that its stock price is 108% less volatile than the S&P 500.

Profitability

This table compares South Jersey Industries and Southern Company Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
South Jersey Industries 7.02% 7.71% 2.68%
Southern Company Gas 6.84% 2.13% 0.90%

Dividends

South Jersey Industries pays an annual dividend of $1.09 per share and has a dividend yield of 3.0%. Southern Company Gas does not pay a dividend. South Jersey Industries pays out 101.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southern Company Gas has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for South Jersey Industries and Southern Company Gas, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
South Jersey Industries 0 3 3 0 2.50
Southern Company Gas 0 0 0 0 N/A

South Jersey Industries presently has a consensus price target of $38.67, suggesting a potential upside of 6.40%. Given South Jersey Industries’ higher possible upside, research analysts plainly believe South Jersey Industries is more favorable than Southern Company Gas.

Earnings & Valuation

This table compares South Jersey Industries and Southern Company Gas’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
South Jersey Industries $1.22 billion 2.36 $261.72 million $1.07 33.96
Southern Company Gas N/A N/A N/A N/A N/A

South Jersey Industries has higher revenue and earnings than Southern Company Gas.

Insider and Institutional Ownership

69.5% of South Jersey Industries shares are held by institutional investors. 0.6% of South Jersey Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

South Jersey Industries beats Southern Company Gas on 10 of the 12 factors compared between the two stocks.

About South Jersey Industries

South Jersey Industries, Inc. (SJI) is an energy services holding company. The Company provides a range of energy-related products and services, primarily through its subsidiaries. Its subsidiaries include South Jersey Gas Company (SJG), South Jersey Energy Company (SJE), South Jersey Resources Group, LLC (SJRG), South Jersey Exploration, LLC (SJEX), Marina Energy, LLC (Marina), South Jersey Energy Service Plus, LLC (SJESP) and SJI Midstream, LLC (Midstream). Its segments include Gas utility operations (SJG), which consist primarily of natural gas distribution; Wholesale energy operations, which include the activities of SJRG and SJEX; SJE, which is involved in both retail gas and retail electric activities; On-Site energy production, which consists of Marina’s thermal energy facility; Appliance service operations, which include SJESP, and Corporate and Services segment, which includes the activities of Midstream.

About Southern Company Gas

Southern Company Gas, formerly AGL Resources Inc, is a natural gas-only distribution company. The Company operates in four operating segments: distribution operations, retail operations, wholesale services and midstream operations. The Company’s distribution operations segment is engaged in providing natural gas to residential, commercial and industrial customers. The retail operations segment is involved in the provision of natural gas commodity and related services. The wholesale services segment is engaged in natural gas storage, gas pipeline arbitrage and provides natural gas asset management and related logistics services for its utilities, as well as for non-affiliated companies. Midstream operations segment consists primarily of natural gas storage facilities and select pipelines, enabling the provision of diverse sources of natural gas supplies to its customers.

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