ONE Gas (OGS) and Regency Energy Partners (RGNC) Critical Survey

ONE Gas (NYSE: OGS) and Regency Energy Partners (NASDAQ:RGNC) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Earnings and Valuation

This table compares ONE Gas and Regency Energy Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ONE Gas $1.50 billion 2.61 $427.06 million $2.87 26.08
Regency Energy Partners N/A N/A N/A N/A N/A

ONE Gas has higher revenue and earnings than Regency Energy Partners.

Dividends

ONE Gas pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. Regency Energy Partners does not pay a dividend. ONE Gas pays out 58.5% of its earnings in the form of a dividend.

Insider & Institutional Ownership

73.2% of ONE Gas shares are held by institutional investors. 1.5% of ONE Gas shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares ONE Gas and Regency Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ONE Gas 10.12% 7.98% 3.14%
Regency Energy Partners -0.30% -0.47% -0.07%

Analyst Recommendations

This is a summary of recent ratings and price targets for ONE Gas and Regency Energy Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ONE Gas 2 2 0 0 1.50
Regency Energy Partners 0 0 0 0 N/A

ONE Gas presently has a consensus price target of $64.00, suggesting a potential downside of 14.50%. Given ONE Gas’ higher possible upside, equities research analysts clearly believe ONE Gas is more favorable than Regency Energy Partners.

Summary

ONE Gas beats Regency Energy Partners on 8 of the 9 factors compared between the two stocks.

About ONE Gas

ONE Gas, Inc. is a regulated natural gas distribution utility in the United States. The Company provides natural gas distribution services. The Company distributes natural gas in Oklahoma, Kansas and Texas. The Company serves residential, commercial and industrial, transportation and wholesale and public authority customers. The Company’s natural gas distribution markets in terms of customers are Oklahoma City and Tulsa, Oklahoma; Kansas City, Wichita and Topeka, Kansas, and Austin and El Paso, Texas. As of December 31, 2016, its three divisions, Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, distribute natural gas to approximately 88%, 72% and 13% of the natural gas distribution customers in Oklahoma, Kansas and Texas, respectively. As of December 31, 2016, the Company had 50.4 billion cubic feet (Bcf) of natural gas storage capacity under lease with remaining terms ranging from 1 to 10 years and maximum allowable daily withdrawal capacity of approximately 1.3 Bcf.

About Regency Energy Partners

Regency Energy Partners LP gathers and processes, compress, treats and transports natural gas; transports, fractionates and stores natural gas liquids (NGLs); gathers, transports and terminals oil received from producers; gathers and disposes salt water, and manages coal and natural resource properties in the United States. The Company has six business segments: Gathering and Processing, Natural Gas Transportation, NGL Services, Contract Services, Natural Resources and Corporate. The Gathering and Processing segment provides wellhead-to-market services to producers of natural gas. The Natural Gas Transportation segment owns a 49.99% general partner interest in RIGS Haynesville Partnership Co. The NGL Services segment owns a 30% membership interest in Lone Star NGL LLC. The Contract Services segment owns and operates a fleet of compressors. The Natural Resources segment manages coal and natural resources properties. The Corporate segment includes its corporate assets.

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