Financial Analysis: UGI (NYSE:UGI) versus APA Group (OTCMKTS:APAJF)

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

Valuation and Earnings

This table compares APA Group and UGI”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
APA Group	N/A	N/A	N/A	$0.39	20.37
UGI	$7.29 billion	1.13	$678.00 million	$2.99	12.85

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
APA Group	N/A	N/A	N/A
UGI	9.20%	12.80%	4.15%

Analyst Ratings

This is a breakdown of current recommendations and price targets for APA Group and UGI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
APA Group	0	1	0	0	2.00
UGI	1	2	3	0	2.33

APA Group presently has a consensus target price of $9.00, suggesting a potential upside of 12.33%. UGI has a consensus target price of $42.00, suggesting a potential upside of 9.32%. Given APA Group’s higher possible upside, equities analysts plainly believe APA Group is more favorable than UGI.

Insider & Institutional Ownership

20.7% of APA Group 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 large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

APA Group pays an annual dividend of $0.28 per share and has a dividend yield of 3.6%. UGI pays an annual dividend of $1.50 per share and has a dividend yield of 3.9%. APA Group pays out 72.4% 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 increased its dividend for 37 consecutive years. UGI is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

UGI beats APA Group on 12 of the 14 factors compared between the two stocks.

About APA Group

APA Group engages in the energy infrastructure business in Australia. The company operates through Energy Infrastructure, Asset Management, and Energy Investments segments. It operates gas transmission pipelines and interconnected grids, gas-fired power stations, electricity transmission interconnectors, solar and wind farms, and battery energy storage systems, as well as gas storage, processing, and compression facilities. The company also has interests in approximately 15,000 kilometers of gas transmission pipelines; approximately 29,500 kilometers of gas mains and pipelines; and 1.5 million gas consumer connections. It also provides asset management and operating services to its energy investments and third parties; and invests in energy infrastructure. The company is headquartered in Sydney, Australia.

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.