Vectren Corporation (NYSE: VVC) and National Fuel Gas (NYSE:NFG) are both mid-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.
Vectren Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.5%. National Fuel Gas pays an annual dividend of $1.66 per share and has a dividend yield of 2.8%. Vectren Corporation pays out 62.2% of its earnings in the form of a dividend. National Fuel Gas pays out 51.7% 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. Vectren Corporation has increased its dividend for 57 consecutive years and National Fuel Gas has increased its dividend for 46 consecutive years. National Fuel Gas is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
63.1% of Vectren Corporation shares are held by institutional investors. Comparatively, 71.8% of National Fuel Gas shares are held by institutional investors. 0.1% of Vectren Corporation shares are held by company insiders. Comparatively, 2.6% of National Fuel Gas shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
Vectren Corporation has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, National Fuel Gas has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Earnings & Valuation
This table compares Vectren Corporation and National Fuel Gas’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Vectren Corporation||$2.59 billion||2.13||$668.60 million||$2.70||24.57|
|National Fuel Gas||$1.59 billion||3.20||$804.38 million||$3.21||18.54|
National Fuel Gas has higher revenue, but lower earnings than Vectren Corporation. National Fuel Gas is trading at a lower price-to-earnings ratio than Vectren Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Vectren Corporation and National Fuel Gas’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|National Fuel Gas||17.38%||18.31%||5.13%|
This is a summary of current ratings and target prices for Vectren Corporation and National Fuel Gas, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Fuel Gas||0||3||0||0||2.00|
Vectren Corporation presently has a consensus price target of $66.00, indicating a potential downside of 0.53%. National Fuel Gas has a consensus price target of $57.00, indicating a potential downside of 4.20%. Given Vectren Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe Vectren Corporation is more favorable than National Fuel Gas.
National Fuel Gas beats Vectren Corporation on 11 of the 17 factors compared between the two stocks.
About Vectren Corporation
Vectren Corporation (Vectren) is an energy holding company. The Company segregates its operations into groups, including the Utility Group, the Nonutility Group, and Corporate and Other. The Company’s subsidiary, Vectren Utility Holdings, Inc. (Utility Holdings or VUHI), serves as the intermediate holding company for three public utilities: Indiana Gas Company, Inc. (Indiana Gas), Southern Indiana Gas and Electric Company (SIGECO) and Vectren Energy Delivery of Ohio, Inc. (VEDO). The Company, through Vectren Enterprises Inc. (Enterprises), is involved in non-utility activities in two primary business areas: Infrastructure Services and Energy Services. Infrastructure Services provides underground pipeline construction and repair services. Energy Services provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects.
About National Fuel Gas
National Fuel Gas Company is a holding company. The Company is an energy company engaged principally in the production, gathering, transportation, distribution and marketing of natural gas. The Company operates in five business segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. The Company operates an integrated business, with assets centered in western New York and Pennsylvania, and the production and transportation of natural gas from the Marcellus Shale basin. The Company also develops and produces oil reserves, primarily in California. The Company’s Exploration and Production segment operations are carried out by Seneca Resources Corporation (Seneca), a Pennsylvania corporation. The Company’s National Fuel Gas Supply Corporation (Supply Corporation), a Pennsylvania corporation, and Empire Pipeline, Inc. (Empire), a New York corporation, carry out the Company’s Pipeline and Storage segment operations.
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