Comparing Ultrapar Participacoes (NYSE:UGP) and NACCO Industries (NYSE:NC)

NACCO Industries (NYSE:NC) and Ultrapar Participacoes (NYSE:UGP) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

49.1% of NACCO Industries shares are owned by institutional investors. Comparatively, 3.6% of Ultrapar Participacoes shares are owned by institutional investors. 44.8% of NACCO Industries shares are owned by insiders. Comparatively, 1.8% of Ultrapar Participacoes shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for NACCO Industries and Ultrapar Participacoes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NACCO Industries	1	0	0	0	1.00
Ultrapar Participacoes	0	4	3	1	2.62

Ultrapar Participacoes has a consensus price target of $6.54, indicating a potential downside of 18.10%. Given Ultrapar Participacoes’ stronger consensus rating and higher probable upside, analysts plainly believe Ultrapar Participacoes is more favorable than NACCO Industries.

Earnings & Valuation

This table compares NACCO Industries and Ultrapar Participacoes”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NACCO Industries	$277.20 million	0.90	$17.57 million	$2.30	14.29
Ultrapar Participacoes	$25.51 billion	0.35	$439.48 million	$0.61	13.09

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

Volatility and Risk

NACCO Industries has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, Ultrapar Participacoes has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Dividends

NACCO Industries pays an annual dividend of $1.05 per share and has a dividend yield of 3.2%. Ultrapar Participacoes pays an annual dividend of $0.31 per share and has a dividend yield of 3.9%. NACCO Industries pays out 45.7% of its earnings in the form of a dividend. Ultrapar Participacoes pays out 50.8% 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. NACCO Industries has raised its dividend for 1 consecutive years.

Profitability

This table compares NACCO Industries and Ultrapar Participacoes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NACCO Industries	6.21%	4.00%	2.60%
Ultrapar Participacoes	2.28%	18.84%	7.17%

Summary

Ultrapar Participacoes beats NACCO Industries on 10 of the 18 factors compared between the two stocks.

About NACCO Industries

NACCO Industries, Inc., together with its subsidiaries, engages in the natural resources business. The company operates through three segments: Coal Mining, North American Mining, and Minerals Management. The Coal Mining segment operates surface coal mines under long-term contracts with power generation companies. Coal is surface mined in North Dakota and Mississippi. The North American Mining segment provides value-added contract mining and other services for producers of aggregates, activated carbon, lithium, and other industrial minerals; and contract mining services for independently owned mines and quarries in Florida, Texas, Arkansas, Virginia, and Nebraska. This segment also offers mining design and consulting services. The Minerals Management segment is involved in the leasing of its royalty and mineral interests to third-party exploration and production companies, and other mining companies, which grants them the rights to explore, develop, mine, produce, market, and sell gas, oil, and coal. NACCO Industries, Inc. was founded in 1913 and is headquartered in Cleveland, Ohio.

About Ultrapar Participacoes

Ultrapar Participações S.A., through its subsidiaries, operates in the energy and infrastructure business in Brazil. The company distributes liquefied petroleum gas to residential, commercial, and industrial consumers, in addition to renewable electricity and compressed natural gas. It also operates in the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; and holds AmPm convenience stores and provides JetOil lubricant services. In addition, the company operates liquid bulk storage terminals. Further, it offers digital payments services, combining the abastece aí app and the loyalty program Km de Vantagens. It also exports its products and services to customers in Europe, Singapore, the United States, Canada, other Latin American countries, and internationally. The company was founded in 1937 and is headquartered in São Paulo, Brazil.