Comparing Southern Union (SUG) & Southern Company Gas (GAS)

Southern Union (NYSE: SUG) and Southern Company Gas (NYSE:GAS) are both mid-cap natural gas distribution companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Valuation & Earnings

This table compares Southern Union and Southern Company Gas’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Southern Union N/A N/A N/A $2.02 N/A
Southern Company Gas N/A N/A N/A $2.84 23.23

Southern Union is trading at a lower price-to-earnings ratio than Southern Company Gas, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Southern Union and Southern Company Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southern Union N/A N/A N/A
Southern Company Gas 2.65% 0.65% 0.27%

Risk and Volatility

Southern Union has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Southern Company Gas has a beta of -0.08, meaning that its share price is 108% less volatile than the S&P 500.

Dividends

Southern Company Gas pays an annual dividend of $2.12 per share and has a dividend yield of 3.2%. Southern Union does not pay a dividend. Southern Company Gas pays out 74.6% of its earnings in the form of a dividend. Southern Company Gas has raised its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Southern Union and Southern Company Gas, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern Union 0 0 0 0 N/A
Southern Company Gas 0 0 0 0 N/A

Summary

Southern Company Gas beats Southern Union on 6 of the 8 factors compared between the two stocks.

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.

Southern Company Gas Company Profile

Southern Company Gas, formerly AGL Resources Inc, is a natural gas-only distribution company. The Company operates in four operating segments: distribution operations, retail operations, wholesale services and midstream operations. The Company’s distribution operations segment is engaged in providing natural gas to residential, commercial and industrial customers. The retail operations segment is involved in the provision of natural gas commodity and related services. The wholesale services segment is engaged in natural gas storage, gas pipeline arbitrage and provides natural gas asset management and related logistics services for its utilities, as well as for non-affiliated companies. Midstream operations segment consists primarily of natural gas storage facilities and select pipelines, enabling the provision of diverse sources of natural gas supplies to its customers.

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