Critical Review: New Fortress Energy (NFE) and South Jersey Industries (SJI)

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New Fortress Energy (NASDAQ:NFE) and South Jersey Industries (NYSE:SJI) are both mid-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for New Fortress Energy and South Jersey Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Fortress Energy 0 2 6 0 2.75
South Jersey Industries 0 3 3 0 2.50

New Fortress Energy presently has a consensus target price of $19.43, indicating a potential upside of 45.21%. South Jersey Industries has a consensus target price of $35.00, indicating a potential upside of 7.39%. Given New Fortress Energy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe New Fortress Energy is more favorable than South Jersey Industries.

Profitability

This table compares New Fortress Energy and South Jersey Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Fortress Energy N/A N/A N/A
South Jersey Industries 3.40% 8.66% 1.98%

Insider & Institutional Ownership

1.9% of New Fortress Energy shares are held by institutional investors. Comparatively, 85.3% of South Jersey Industries shares are held by institutional investors. 0.6% of South Jersey Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

South Jersey Industries pays an annual dividend of $1.15 per share and has a dividend yield of 3.5%. New Fortress Energy does not pay a dividend. South Jersey Industries pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares New Fortress Energy and South Jersey Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Fortress Energy N/A N/A N/A N/A N/A
South Jersey Industries $1.64 billion 1.83 $17.66 million $1.38 23.62

South Jersey Industries has higher revenue and earnings than New Fortress Energy.

Summary

South Jersey Industries beats New Fortress Energy on 7 of the 11 factors compared between the two stocks.

About New Fortress Energy

New Fortress Energy LLC operates as an integrated gas-to-power company. The company's activities include natural gas procurement and liquefaction; provision of logistics and shipping services; development and operation of terminals; and conversion or development of natural gas-fired generation. It intends to serve power, transportation, and industrial users of natural gas and LNG. The company was founded in 1998 and is based in New York, New York. New Fortress Energy LLC is a subsidiary of Fortress Investment Group LLC.

About South Jersey Industries

South Jersey Industries, Inc., through its subsidiaries, provides energy-related products and services. The company engages in the purchase, transmission, and sale of natural gas. It also sells natural gas and pipeline transportation capacity on a wholesale basis to residential, commercial, and industrial customers on the interstate pipeline system, as well as transports natural gas, which is purchased directly from producers or suppliers to their customers. As of December 31, 2018, the company had approximately 146.2 miles of mains in the transmission system and 6,567 miles of mains in the distribution system; and served 391,092 residential, commercial, and industrial customers in southern New Jersey. In addition, it markets natural gas storage, commodity, and transportation assets on a wholesale basis for energy marketers, electric and gas utilities, power plants, and natural gas producers in the mid-Atlantic, Appalachian, and southern regions of the United States. Further, the company develops, owns, and operates energy projects comprising natural gas fueled combined heating, cooling and power, and landfill gas-to-energy production facilities, as well as solar-generation sites. Additionally, it owns oil, gas, and mineral rights in the Marcellus Shale region of Pennsylvania; acquires and markets natural gas and electricity to retail end users, as well as provides total energy management services; and services residential and small commercial HVAC systems, and installs small commercial HVAC systems, as well as provides plumbing services and services appliances. South Jersey Industries, Inc. was founded in 1910 and is headquartered in Folsom, New Jersey.

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