ONE Gas (NYSE:OGS – Get Free Report) and AltaGas (OTCMKTS:ATGFF – Get Free Report) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
Insider & Institutional Ownership
88.7% of ONE Gas shares are owned by institutional investors. Comparatively, 28.7% of AltaGas shares are owned by institutional investors. 0.9% of ONE Gas shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Dividends
ONE Gas pays an annual dividend of $2.72 per share and has a dividend yield of 3.4%. AltaGas pays an annual dividend of $1.50 per share and has a dividend yield of 4.0%. ONE Gas pays out 58.6% 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. ONE Gas has increased its dividend for 2 consecutive years.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| ONE Gas | 12.47% | 8.81% | 3.45% |
| AltaGas | N/A | N/A | N/A |
Analyst Ratings
This is a breakdown of current ratings for ONE Gas and AltaGas, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ONE Gas | 0 | 6 | 6 | 0 | 2.50 |
| AltaGas | 0 | 0 | 6 | 0 | 3.00 |
ONE Gas currently has a consensus price target of $89.23, suggesting a potential upside of 11.89%. Given ONE Gas’ higher possible upside, research analysts clearly believe ONE Gas is more favorable than AltaGas.
Valuation and Earnings
This table compares ONE Gas and AltaGas”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ONE Gas | $2.43 billion | 2.07 | $264.22 million | $4.64 | 17.19 |
| AltaGas | N/A | N/A | N/A | $1.10 | 34.48 |
ONE Gas has higher revenue and earnings than AltaGas. ONE Gas is trading at a lower price-to-earnings ratio than AltaGas, indicating that it is currently the more affordable of the two stocks.
Summary
ONE Gas beats AltaGas on 10 of the 13 factors compared between the two stocks.
About ONE Gas
ONE Gas, Inc., together with its subsidiaries, operates as a regulated natural gas distribution company in the United States. The company provides natural gas distribution services to approximately 2.3 million customers in Oklahoma, Kansas, and Texas. It serves residential, commercial, and transportation customers. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.
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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