RGC Resources (NASDAQ:RGCO – Get Free Report) and AltaGas (OTCMKTS:ATGFF – Get Free Report) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.
Analyst Ratings
This is a breakdown of current recommendations and price targets for RGC Resources and AltaGas, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RGC Resources | 0 | 0 | 1 | 0 | 3.00 |
| AltaGas | 0 | 0 | 6 | 0 | 3.00 |
Earnings & Valuation
This table compares RGC Resources and AltaGas”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RGC Resources | $107.14 million | 2.09 | $13.28 million | $1.34 | 16.07 |
| AltaGas | N/A | N/A | N/A | $1.10 | 34.86 |
RGC Resources has higher revenue and earnings than AltaGas. RGC Resources is trading at a lower price-to-earnings ratio than AltaGas, indicating that it is currently the more affordable of the two stocks.
Dividends
RGC Resources pays an annual dividend of $0.87 per share and has a dividend yield of 4.0%. AltaGas pays an annual dividend of $1.50 per share and has a dividend yield of 3.9%. RGC Resources pays out 64.9% of its earnings in the form of a dividend. AltaGas pays out 136.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RGC Resources has increased its dividend for 22 consecutive years. RGC Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
35.8% of RGC Resources shares are owned by institutional investors. Comparatively, 28.7% of AltaGas shares are owned by institutional investors. 7.2% of RGC Resources shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares RGC Resources and AltaGas’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RGC Resources | 13.05% | 11.73% | 4.15% |
| AltaGas | N/A | N/A | N/A |
Summary
RGC Resources beats AltaGas on 10 of the 12 factors compared between the two stocks.
About RGC Resources
RGC Resources, Inc., through its subsidiaries, operates as an energy services company. It sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. The company also provides various unregulated services. It operates approximately 1,179 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility, as well as owns and operates six metering stations. In addition, it produces biogas. RGC Resources, Inc. was founded in 1883 and is based in Roanoke, Virginia.
About AltaGas
AltaGas Ltd. operates as an energy infrastructure company in North America. The company operates through Utilities and Midstream segments. The Utilities segment owns and operates franchised, cost-of-service, rate-regulated natural gas distribution and storage utilities in Maryland, Virginia, Delaware, Pennsylvania, Ohio, and the District of Columbia serving approximately 1.6 million customers. This segment also provides interstate natural gas transportation and storage services. The Midstream segment engages in the natural gas gathering, processing, and extraction with 1.2 billion cubic feet per day (Bcf/d) of extraction processing capacity and approximately 1.2 Bcf/d of raw field gas processing capacity; fractionation and liquids handling business; and natural gas and natural gas liquids marketing activities. It also engages in LPG exports and distribution, logistics, trucking and rail terminals, and liquid storage businesses. In addition, the company operates gas-fired power generation and distribution assets with a generating capacity of 508 megawatt of power in California. It serves residential, commercial, and industrial customers. AltaGas Ltd. was founded in 1994 and is headquartered in Calgary, Canada.
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