Reviewing Spire (NYSE:SR) and Naturgy Energy Group (OTCMKTS:GASNF)

Naturgy Energy Group (OTCMKTS:GASNF) and Spire (NYSE:SR) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Naturgy Energy Group and Spire’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Naturgy Energy Group	N/A	N/A	N/A
Spire	21.48%	8.65%	2.21%

Insider and Institutional Ownership

9.2% of Naturgy Energy Group shares are owned by institutional investors. Comparatively, 87.4% of Spire shares are owned by institutional investors. 2.3% of Spire shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Naturgy Energy Group pays an annual dividend of $0.71 per share and has a dividend yield of 2.1%. Spire pays an annual dividend of $3.30 per share and has a dividend yield of 4.0%. Naturgy Energy Group pays out 45.4% of its earnings in the form of a dividend. Spire pays out 36.8% 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. Spire has increased its dividend for 22 consecutive years. Spire is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations for Naturgy Energy Group and Spire, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Naturgy Energy Group	0	0	0	0	0.00
Spire	0	5	5	2	2.75

Spire has a consensus target price of $94.50, suggesting a potential upside of 14.05%. Given Spire’s stronger consensus rating and higher probable upside, analysts plainly believe Spire is more favorable than Naturgy Energy Group.

Valuation and Earnings

This table compares Naturgy Energy Group and Spire”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Naturgy Energy Group	N/A	N/A	N/A	$1.56	21.70
Spire	$2.67 billion	1.84	$271.70 million	$8.97	9.24

Spire has higher revenue and earnings than Naturgy Energy Group. Spire is trading at a lower price-to-earnings ratio than Naturgy Energy Group, indicating that it is currently the more affordable of the two stocks.

Summary

Spire beats Naturgy Energy Group on 14 of the 15 factors compared between the two stocks.

About Naturgy Energy Group

Naturgy Energy Group, S.A., together with its subsidiaries, engages in the supply, liquefaction, regasification, transport, storage, distribution, and sale of natural gas. It operates through Distribution Networks and Energy Markets segments. The company engages in the regulated gas and electricity distribution; sale of liquefied natural gas and the maritime transport business; management conventional thermal generation facilities; and generation and sale of electricity through wind, mini-hydro, solar, and cogeneration sources, as well as provision of supply management services. It serves in Spain, Australia, the United States, Argentina, Brazil, Chile, Mexico, Panama, the rest of Latin America, and internationally. The company was formerly known as Gas Natural SDG, S.A. and changed its name to Naturgy Energy Group, S.A. in June 2018. Naturgy Energy Group, S.A. was incorporated in 1843 and is based in Madrid, Spain.

About Spire

Spire Inc., together with its subsidiaries, engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates through three segments: Gas Utility, Gas Marketing, and Midstream. It is also involved in the marketing of natural gas and related services; and transportation and storage of natural gas. In addition, the company engages in the operation of propane through its propane pipeline, risk management, and other activities. The company was formerly known as The Laclede Group, Inc. and changed its name to Spire Inc. in April 2016. Spire Inc. was founded in 1857 and is based in Saint Louis, Missouri.