Reviewing UGI (NYSE:UGI) & Hong Kong & China Gas (OTCMKTS:HOKCY)

Hong Kong & China Gas (OTCMKTS:HOKCY) and UGI (NYSE:UGI) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings for Hong Kong & China Gas and UGI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hong Kong & China Gas	0	0	0	0	0.00
UGI	0	3	2	0	2.40

UGI has a consensus price target of $31.33, indicating a potential downside of 1.28%. Given UGI’s stronger consensus rating and higher probable upside, analysts plainly believe UGI is more favorable than Hong Kong & China Gas.

Risk & Volatility

Hong Kong & China Gas has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, UGI has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Valuation and Earnings

This table compares Hong Kong & China Gas and UGI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hong Kong & China Gas	$7.11 billion	2.31	$732.21 million	N/A	N/A
UGI	$7.21 billion	0.95	$269.00 million	$1.90	16.71

Hong Kong & China Gas has higher earnings, but lower revenue than UGI.

Dividends

Hong Kong & China Gas pays an annual dividend of $0.02 per share and has a dividend yield of 2.3%. UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.7%. UGI pays out 78.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UGI has increased its dividend for 37 consecutive years. UGI is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Hong Kong & China Gas and UGI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hong Kong & China Gas	N/A	N/A	N/A
UGI	5.70%	15.73%	4.81%

Insider & Institutional Ownership

82.3% of UGI shares are owned by institutional investors. 0.7% of UGI shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

UGI beats Hong Kong & China Gas on 12 of the 15 factors compared between the two stocks.

About Hong Kong & China Gas

The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas, water supply and energy services in Hong Kong and Mainland China. It is involved in the provision of smart energy, piped city-gas, upstream and midstream projects, water supply and wastewater treatment, urban waste resource utilization, and natural gas filling stations, as well as new energy exploration and utilization activities. The company develops new energy projects that are low in emissions and pollution, which includes clean coal chemical business, liquefaction of methane, etc., as well as supplies town gas. It also provides network connectivity, data center, and ICT services, as well as engineering, procurement, and construction services. In addition, the company offers consultancy and engineering contractor services, including utilities installation, infrastructure construction, and civil and building services engineering for public and private projects; and designs and manufactures gas meters and metering systems. Further, it is involved in water supply, and domestic sewage and industrial wastewater treatment activities. Additionally, the company manufactures polyethylene piping and fittings; as well as engages in the software development, solution implementation, and systems integration activities. The Hong Kong and China Gas Company Limited was founded in 1862 and is headquartered in North Point, Hong Kong.

About UGI

UGI Corporation, together with its subsidiaries, distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.3 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,400 propane distribution locations. The company distributes liquefied petroleum gases (LPG) to residential, commercial, industrial, agricultural, wholesale and automobile fuel customers; and provides logistics, storage, and other services to third-party LPG distributors. In addition, it engages in the retail sale of natural gas, liquid fuels, and electricity to approximately 12,400 residential, commercial, and industrial customers at 42,000 locations. Further, the company distributes natural gas to approximately 677,000 customers in eastern and central Pennsylvania counties through its distribution system of approximately 12,500 miles of gas mains; and supplies electricity to approximately 62,600 customers in northeastern Pennsylvania through 2,560 miles of lines and 14 substations. Additionally, it operates electric generation facilities, which include coal-fired, landfill gas-fueled, solar-powered, and natural gas-fueled facilities; a natural gas liquefaction, storage, and vaporization facility; propane storage and propane-air mixing stations; and rail transshipment terminals. It manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities. UGI Corporation was incorporated in 1882 and is headquartered in King of Prussia, Pennsylvania.