UGI (NYSE:UGI) and PT Perusahaan Gas Negara Tbk (OTCMKTS:PPAAF) Critical Review

PT Perusahaan Gas Negara Tbk (OTCMKTS:PPAAF) and UGI (NYSE:UGI) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Earnings and Valuation

This table compares PT Perusahaan Gas Negara Tbk and UGI”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PT Perusahaan Gas Negara Tbk	N/A	N/A	N/A	$0.04	2.38
UGI	$7.36 billion	1.05	$678.00 million	$2.85	12.70

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

Insider and Institutional Ownership

21.0% of PT Perusahaan Gas Negara Tbk shares are held by institutional investors. Comparatively, 82.3% of UGI shares are held by institutional investors. 0.6% of UGI shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

PT Perusahaan Gas Negara Tbk pays an annual dividend of $0.01 per share and has a dividend yield of 16.2%. UGI pays an annual dividend of $1.50 per share and has a dividend yield of 4.1%. PT Perusahaan Gas Negara Tbk pays out 38.7% of its earnings in the form of a dividend. UGI pays out 52.6% 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 increased its dividend for 37 consecutive years. PT Perusahaan Gas Negara Tbk is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations and price targets for PT Perusahaan Gas Negara Tbk and UGI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PT Perusahaan Gas Negara Tbk	0	0	0	0	0.00
UGI	1	1	3	1	2.67

UGI has a consensus target price of $43.33, suggesting a potential upside of 19.71%. Given UGI’s stronger consensus rating and higher probable upside, analysts clearly believe UGI is more favorable than PT Perusahaan Gas Negara Tbk.

Profitability

This table compares PT Perusahaan Gas Negara Tbk and UGI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PT Perusahaan Gas Negara Tbk	N/A	N/A	N/A
UGI	8.71%	13.81%	4.42%

Summary

UGI beats PT Perusahaan Gas Negara Tbk on 13 of the 15 factors compared between the two stocks.

About PT Perusahaan Gas Negara Tbk

PT Perusahaan Gas Negara Tbk, together with its subsidiaries, engages in the transmission and distribution of natural gas in Indonesia. It operates through three segments: Gas Trading and Transmission, Exploration and Production of Oil and Gas, and Other Operations. The company is involved in the exploration, exploitation, and business development in oil and gas; and trading and transmission of gas, and processing of liquefied natural gas to industrial, commercial and household customers. It also provides fiber optic rental for network services; construction and maintenance services to the customers; management and leasing services of buildings and equipment; engineering and consultancy services; telecommunications; and electricity services. The company was founded in 1859 and is headquartered in Jakarta, Indonesia. PT Perusahaan Gas Negara Tbk operates as a subsidiary of PT Pertamina (Persero).

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.