NewJersey Resources (NYSE:NJR – Get Free Report) and Northwest Natural Gas (NYSE:NWN – Get Free Report) are both mid-cap utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for NewJersey Resources and Northwest Natural Gas, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NewJersey Resources | 0 | 2 | 4 | 1 | 2.86 |
| Northwest Natural Gas | 0 | 4 | 5 | 1 | 2.70 |
NewJersey Resources presently has a consensus target price of $62.50, suggesting a potential upside of 15.15%. Northwest Natural Gas has a consensus target price of $55.43, suggesting a potential upside of 7.15%. Given NewJersey Resources’ stronger consensus rating and higher probable upside, equities research analysts clearly believe NewJersey Resources is more favorable than Northwest Natural Gas.
Dividends
NewJersey Resources pays an annual dividend of $2.00 per share and has a dividend yield of 3.7%. Northwest Natural Gas pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. NewJersey Resources pays out 55.2% of its earnings in the form of a dividend. Northwest Natural Gas pays out 66.7% 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. NewJersey Resources has raised its dividend for 29 consecutive years and Northwest Natural Gas has raised its dividend for 70 consecutive years. Northwest Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares NewJersey Resources and Northwest Natural Gas’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NewJersey Resources | 16.42% | 14.46% | 4.67% |
| Northwest Natural Gas | 9.65% | 8.23% | 1.97% |
Valuation & Earnings
This table compares NewJersey Resources and Northwest Natural Gas”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NewJersey Resources | $2.23 billion | 2.47 | $335.63 million | $3.62 | 14.99 |
| Northwest Natural Gas | $1.29 billion | 1.69 | $113.32 million | $3.00 | 17.24 |
NewJersey Resources has higher revenue and earnings than Northwest Natural Gas. NewJersey Resources is trading at a lower price-to-earnings ratio than Northwest Natural Gas, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
71.0% of NewJersey Resources shares are owned by institutional investors. Comparatively, 75.1% of Northwest Natural Gas shares are owned by institutional investors. 0.7% of NewJersey Resources shares are owned by insiders. Comparatively, 0.6% of Northwest Natural Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
NewJersey Resources has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Northwest Natural Gas has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.
Summary
NewJersey Resources beats Northwest Natural Gas on 12 of the 17 factors compared between the two stocks.
About NewJersey Resources
New Jersey Resources Corporation, an energy services holding company, distributes natural gas. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation. The Natural Gas Distribution segment offers regulated natural gas utility services to approximately 576,000 customers in Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey; provides capacity and storage management services; and participates in the off-system sales and capacity release markets. The Clean Energy Ventures segment invests in, owns, and operates clean energy projects, including commercial and residential solar installation situated in New Jersey, Rhode Island, New York, Connecticut, Michigan, and Indiana. The Energy Services segment maintains and operates natural gas transportation and storage capacity contracts, as well as provides physical wholesale energy, retail energy and energy management services in the United States and Canada. The Storage and Transportation segment invests in invests in energy-related ventures. It provides heating, ventilation, and cooling services; sales and installation of appliances; offers solar equipment installation, and plumbing repair and installation services; and holds commercial real estate properties. The company was incorporated in 1981 and is headquartered in Wall, New Jersey.
About Northwest Natural Gas
Northwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, and industrial customers in the United States. The company operates a mist gas storage facility contracted to other utilities, third-party marketers, and electric generators; offers natural gas asset management services; and operates an appliance retail center. It also engages in gas storage, water and wastewater, non-regulated renewable natural gas, and other investment businesses. In addition, the company provides natural gas service in Oregon and southwest Washington; and water and wastewater connections. Northwest Natural Holding Company was founded in 1859 and is headquartered in Portland, Oregon.
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