Snam (OTCMKTS:SNMRF) vs. UGI (NYSE:UGI) Head to Head Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Snam	N/A	N/A	N/A
UGI	9.20%	12.89%	4.14%

Insider & Institutional Ownership

22.6% of Snam shares are owned by institutional investors. Comparatively, 82.3% of UGI shares are owned by institutional investors. 0.6% of UGI shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Snam and UGI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Snam	2	2	1	0	1.80
UGI	1	1	3	1	2.67

UGI has a consensus target price of $43.33, indicating a potential upside of 26.08%. Given UGI’s stronger consensus rating and higher probable upside, analysts clearly believe UGI is more favorable than Snam.

Dividends

Snam pays an annual dividend of $0.20 per share and has a dividend yield of 3.0%. UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.4%. Snam pays out 61.1% of its earnings in the form of a dividend. UGI pays out 50.2% 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. UGI has raised its dividend for 37 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 Snam and UGI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Snam	N/A	N/A	N/A	$0.33	20.11
UGI	$7.36 billion	1.00	$678.00 million	$2.99	11.50

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

Summary

UGI beats Snam on 14 of the 15 factors compared between the two stocks.

About Snam

Snam S.p.A., together with its subsidiaries, engages in the operation of natural gas transport and storage infrastructure. The company operates through Transportation, Storage, Regasification, Energy Transition, and other segments. It provides natural gas transportation and dispatching services; and owns and manages liquified natural gas (LNG) regasification plants. The company also offers natural gas storage services through an integrated group of infrastructure comprising deposits, wells, gas treatment and compression plants, and the operational dispatching systems; and operates storage concessions located in Lombardy, Emilia-Romagna, and Abruzzo. In addition, it provides energy efficiency solutions for companies, condominiums, tertiary, and public administration sectors; and invests, constructs, develops, and operates biogas and biomethane plants. Further, the company offers engineering support and consulting services in technical and specialized fields; and sells automotive compressed natural gas (CNG) compressors. It operates a natural gas transportation network of approximately 38,000 kilometers in Italy, Austria, Tunisia, Egypt, the United Arab Emirates, France, Greece, and the United Kingdom. The company was formerly known as Snam Rete Gas S.p.A. and changed its name to Snam S.p.A. in January 2012. Snam S.p.A. was founded in 1941 and is headquartered in San Donato Milanese, Italy.

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.