Chesapeake Utilities Corporation (CPK) versus Southern Union (SUG) Critical Contrast

Chesapeake Utilities Corporation (NYSE: CPK) and Southern Union (NYSE:SUG) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares Chesapeake Utilities Corporation and Southern Union’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chesapeake Utilities Corporation 7.58% 9.62% 3.53%
Southern Union N/A N/A N/A

Analyst Recommendations

This is a summary of recent recommendations for Chesapeake Utilities Corporation and Southern Union, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chesapeake Utilities Corporation 0 5 0 0 2.00
Southern Union 0 0 0 0 N/A

Chesapeake Utilities Corporation presently has a consensus price target of $73.00, suggesting a potential downside of 9.26%.

Risk and Volatility

Chesapeake Utilities Corporation has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, Southern Union has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Valuation and Earnings

This table compares Chesapeake Utilities Corporation and Southern Union’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Chesapeake Utilities Corporation $498.86 million 2.64 $44.67 million $2.69 29.91
Southern Union N/A N/A N/A $2.02 N/A

Chesapeake Utilities Corporation has higher revenue and earnings than Southern Union. Southern Union is trading at a lower price-to-earnings ratio than Chesapeake Utilities Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Chesapeake Utilities Corporation pays an annual dividend of $1.30 per share and has a dividend yield of 1.6%. Southern Union does not pay a dividend. Chesapeake Utilities Corporation pays out 48.3% of its earnings in the form of a dividend. Chesapeake Utilities Corporation has increased its dividend for 13 consecutive years.

Insider and Institutional Ownership

61.3% of Chesapeake Utilities Corporation shares are owned by institutional investors. 4.2% of Chesapeake Utilities Corporation shares are owned by company 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.

Summary

Chesapeake Utilities Corporation beats Southern Union on 9 of the 11 factors compared between the two stocks.

Chesapeake Utilities Corporation Company Profile

Chesapeake Utilities Corporation (Chesapeake) is an energy company. The Company operates through two segments: Regulated Energy and Unregulated Energy. The Company provides natural gas distribution and transmission; natural gas supply, gathering, processing and marketing; electric distribution and generation; propane distribution; propane and crude oil wholesale marketing; steam generation, and other energy-related services. The Regulated Energy segment includes the Company’s natural gas distribution, natural gas transmission and electric distribution operations. The Unregulated Energy segment includes its propane distribution, propane and crude oil wholesale marketing, natural gas marketing and unregulated natural gas supply, gathering and processing, electricity and steam generation and other unregulated energy-related services to customers.

Southern Union Company Profile

Southern Union Company (Southern Union) is engaged in the gathering, processing, transportation, storage and distribution of natural gas in the United States. The Company owns and operates assets in the regulated and unregulated natural gas industry. Southern Union operates in three segments: Transportation and Storage, which is engaged in the interstate transportation and storage of natural gas and provides liquefied natural gas (LNG) terminalling and re-gasification services; Gathering and Processing, which is engaged in the gathering, treating, processing and redelivery of natural gas and natural gas liquid (NGL) in Texas and New Mexico, and Distribution, which is engaged in the local distribution of natural gas in Missouri. Effective December 20, 2013, Algonquin Power & Utilities Corp. (APUC) announced that, Liberty Utilities, APUC’s regulated distribution utility, acquired the Massachusetts natural gas distribution utility assets (New England Gas Assets) of Southern Union Company.

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