Reviewing Spire (NYSE:SR) and UGI (NYSE:UGI)

UGI (NYSE:UGI) and Spire (NYSE:SR) are both mid-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Dividends

UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.3%. Spire pays an annual dividend of $3.14 per share and has a dividend yield of 4.1%. UGI pays out 78.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spire pays out 67.8% of its earnings in the form of a dividend. UGI has increased its dividend for 37 consecutive years and Spire has increased its dividend for 22 consecutive years. UGI is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares UGI and Spire”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UGI	$7.21 billion	1.05	$269.00 million	$1.90	18.45
Spire	$2.59 billion	1.74	$250.90 million	$4.63	16.52

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

Profitability

This table compares UGI and Spire’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UGI	5.70%	15.73%	4.81%
Spire	11.56%	8.66%	2.42%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for UGI and Spire, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UGI	0	2	2	0	2.50
Spire	2	4	3	1	2.30

UGI presently has a consensus price target of $31.33, suggesting a potential downside of 10.63%. Spire has a consensus price target of $79.20, suggesting a potential upside of 3.56%. Given Spire’s higher probable upside, analysts plainly believe Spire is more favorable than UGI.

Risk & Volatility

UGI has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Spire has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Insider and Institutional Ownership

82.3% of UGI shares are held by institutional investors. Comparatively, 87.4% of Spire shares are held by institutional investors. 0.7% of UGI shares are held by insiders. Comparatively, 2.3% of Spire shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

About UGI

UGI Corporation, together with its subsidiaries, distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.3 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,400 propane distribution locations. The company distributes liquefied petroleum gases (LPG) to residential, commercial, industrial, agricultural, wholesale and automobile fuel customers; and provides logistics, storage, and other services to third-party LPG distributors. In addition, it engages in the retail sale of natural gas, liquid fuels, and electricity to approximately 12,400 residential, commercial, and industrial customers at 42,000 locations. Further, the company distributes natural gas to approximately 677,000 customers in eastern and central Pennsylvania counties through its distribution system of approximately 12,500 miles of gas mains; and supplies electricity to approximately 62,600 customers in northeastern Pennsylvania through 2,560 miles of lines and 14 substations. Additionally, it operates electric generation facilities, which include coal-fired, landfill gas-fueled, solar-powered, and natural gas-fueled facilities; a natural gas liquefaction, storage, and vaporization facility; propane storage and propane-air mixing stations; and rail transshipment terminals. It manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities. UGI Corporation was incorporated in 1882 and is headquartered in King of Prussia, Pennsylvania.

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.