RGC Resources (NASDAQ:RGCO) versus Northwest Natural Gas (NYSE:NWN) Head to Head Survey

RGC Resources (NASDAQ:RGCO) and Northwest Natural Gas (NYSE:NWN) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Volatility and Risk

RGC Resources has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Northwest Natural Gas has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Valuation & Earnings

This table compares RGC Resources and Northwest Natural Gas”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RGC Resources	$95.33 million	2.40	$13.28 million	$1.34	16.37
Northwest Natural Gas	$1.29 billion	1.61	$113.32 million	$3.00	16.40

Northwest Natural Gas has higher revenue and earnings than RGC Resources. RGC 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.

Profitability

This table compares RGC Resources and Northwest Natural Gas’ 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%
Northwest Natural Gas	9.75%	8.33%	2.03%

Insider and Institutional Ownership

35.8% of RGC Resources shares are held by institutional investors. Comparatively, 75.1% of Northwest Natural Gas shares are held by institutional investors. 7.2% of RGC Resources shares are held by insiders. Comparatively, 0.6% of Northwest Natural Gas shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

RGC Resources pays an annual dividend of $0.87 per share and has a dividend yield of 4.0%. Northwest Natural Gas pays an annual dividend of $1.97 per share and has a dividend yield of 4.0%. RGC Resources pays out 64.9% of its earnings in the form of a dividend. Northwest Natural Gas pays out 65.7% 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. RGC Resources has raised its dividend for 22 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for RGC Resources and Northwest Natural Gas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RGC Resources	0	0	1	0	3.00
Northwest Natural Gas	0	2	3	1	2.83

Northwest Natural Gas has a consensus target price of $55.25, indicating a potential upside of 12.30%. Given Northwest Natural Gas’ higher probable upside, analysts clearly believe Northwest Natural Gas is more favorable than RGC Resources.

Summary

Northwest Natural Gas beats RGC Resources on 10 of the 18 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 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.