JP Energy Partners (NYSE: JPEP) and Northwest Natural Gas (NYSE:NWN) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.
This is a breakdown of current ratings for JP Energy Partners and Northwest Natural Gas, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|JP Energy Partners||0||0||1||0||3.00|
|Northwest Natural Gas||0||2||1||0||2.33|
JP Energy Partners currently has a consensus target price of $11.00, suggesting a potential upside of 16.53%. Northwest Natural Gas has a consensus target price of $75.00, suggesting a potential upside of 12.95%. Given JP Energy Partners’ stronger consensus rating and higher possible upside, research analysts plainly believe JP Energy Partners is more favorable than Northwest Natural Gas.
Valuation and Earnings
This table compares JP Energy Partners and Northwest Natural Gas’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|JP Energy Partners||N/A||N/A||N/A||($1.59)||-5.94|
|Northwest Natural Gas||$754.82 million||2.52||$257.76 million||$2.21||30.05|
Northwest Natural Gas has higher revenue and earnings than JP Energy Partners. JP Energy Partners is trading at a lower price-to-earnings ratio than Northwest Natural Gas, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
JP Energy Partners has a beta of 3.3, suggesting that its stock price is 230% more volatile than the S&P 500. Comparatively, Northwest Natural Gas has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.
This table compares JP Energy Partners and Northwest Natural Gas’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|JP Energy Partners||-5.61%||-5.99%||-4.01%|
|Northwest Natural Gas||8.38%||7.51%||2.08%|
Institutional and Insider Ownership
53.4% of JP Energy Partners shares are owned by institutional investors. Comparatively, 63.5% of Northwest Natural Gas shares are owned by institutional investors. 1.5% of Northwest Natural Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
JP Energy Partners pays an annual dividend of $1.30 per share and has a dividend yield of 13.8%. Northwest Natural Gas pays an annual dividend of $1.88 per share and has a dividend yield of 2.8%. JP Energy Partners pays out -81.8% of its earnings in the form of a dividend. Northwest Natural Gas pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Northwest Natural Gas has raised its dividend for 61 consecutive years. JP Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Northwest Natural Gas beats JP Energy Partners on 8 of the 13 factors compared between the two stocks.
JP Energy Partners Company Profile
JP Energy Partners LP owns, operates, develops and acquires a portfolio of midstream energy assets. The Company provides midstream infrastructure solutions for the supply of crude oil, refined products and natural gas liquids (NGLs) in the United States. The Company’s segments include crude oil pipelines and storage, refined products terminals and storage, and NGL distribution and sales. The Company’s crude oil businesses are situated in areas, including the Permian Basin and Eagle Ford shale. Its crude oil pipelines and storage segment manages the physical movement of crude oil from origination to final destination through its network of owned and leased assets. Its refined product terminals and storage segment consists of approximately two refined products terminals located in North Little Rock, Arkansas and Caddo Mills, Texas. The Company’s NGL distribution and sales segment involves the retail, commercial and wholesale sale of NGLs and other refined products.
Northwest Natural Gas Company Profile
Northwest Natural Gas Company (NW Natural) is engaged in the distribution of natural gas. The Company’s segments include Local Gas Distribution, Gas Storage and other. The Company maintains operations in Oregon, Washington and California and conducts businesses through NW Natural and its subsidiaries. The local gas distribution business, referred to as the utility segment, serves residential, commercial, and industrial customers in Oregon and southwest Washington. The Company’s gas storage business, referred to as the gas storage segment, provides storage services for utilities, gas marketers, electric generators and industrial users from storage facilities located in Oregon and California. The Company’s other segment is referred to as non-utility and consists of non-utility investments and other business activities. The other segment consists of an equity method investment in Trail West Holdings, LLC (TWH) and other pipeline assets in NNG Financial Corporation.
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