Critical Comparison: National Fuel Gas (NFG) versus South Jersey Industries (SJI)

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

Dividends

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National Fuel Gas pays an annual dividend of $1.66 per share and has a dividend yield of 3.3%. South Jersey Industries pays an annual dividend of $1.12 per share and has a dividend yield of 3.7%. National Fuel Gas pays out 50.3% of its earnings in the form of a dividend. South Jersey Industries pays out 91.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Fuel Gas has increased its dividend for 47 consecutive years.

Valuation and Earnings

This table compares National Fuel Gas and South Jersey Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Fuel Gas $1.58 billion 2.73 $283.48 million $3.30 15.24
South Jersey Industries $1.24 billion 1.92 -$3.49 million $1.23 24.33

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

Profitability

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

Net Margins Return on Equity Return on Assets
National Fuel Gas 24.93% 16.36% 4.79%
South Jersey Industries -0.28% 7.84% 2.60%

Institutional & Insider Ownership

71.6% of National Fuel Gas shares are owned by institutional investors. Comparatively, 70.5% of South Jersey Industries shares are owned by institutional investors. 2.6% of National Fuel Gas shares are owned by insiders. Comparatively, 0.6% of South Jersey Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

National Fuel Gas has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, South Jersey Industries has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for National Fuel Gas and South Jersey Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Fuel Gas 0 2 2 0 2.50
South Jersey Industries 0 5 2 0 2.29

National Fuel Gas presently has a consensus target price of $60.50, indicating a potential upside of 20.33%. South Jersey Industries has a consensus target price of $32.80, indicating a potential upside of 9.63%. Given National Fuel Gas’ stronger consensus rating and higher possible upside, equities analysts plainly believe National Fuel Gas is more favorable than South Jersey Industries.

Summary

National Fuel Gas beats South Jersey Industries on 14 of the 16 factors compared between the two stocks.

National Fuel Gas Company Profile

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.

South Jersey Industries Company Profile

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.

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