Head-To-Head Contrast: Piedmont Natural Gas (PNY) & Spire (NYSE:SR)

Piedmont Natural Gas (NYSE: PNY) and Spire (NYSE:SR) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Dividends

Piedmont Natural Gas pays an annual dividend of $1.36 per share and has a dividend yield of 2.3%. Spire pays an annual dividend of $2.10 per share and has a dividend yield of 2.8%. Piedmont Natural Gas pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spire pays out 60.2% of its earnings in the form of a dividend. Spire has increased its dividend for 38 consecutive years. Spire is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Piedmont Natural Gas and Spire, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piedmont Natural Gas 0 0 0 0 N/A
Spire 1 5 1 0 2.00

Spire has a consensus target price of $70.50, suggesting a potential downside of 6.06%. Given Spire’s higher possible upside, analysts plainly believe Spire is more favorable than Piedmont Natural Gas.

Earnings and Valuation

This table compares Piedmont Natural Gas and Spire’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Piedmont Natural Gas N/A N/A N/A $1.72 34.90
Spire $1.76 billion 2.05 $462.00 million $3.49 21.50

Spire has higher revenue and earnings than Piedmont Natural Gas. Spire is trading at a lower price-to-earnings ratio than Piedmont Natural Gas, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

61.5% of Piedmont Natural Gas shares are owned by institutional investors. Comparatively, 74.7% of Spire shares are owned by institutional investors. 1.4% of Piedmont Natural Gas shares are owned by company insiders. Comparatively, 3.1% of Spire shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Piedmont Natural Gas and Spire’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piedmont Natural Gas 19.00% 22.34% 6.57%
Spire 9.12% 8.77% 2.63%

Risk and Volatility

Piedmont Natural Gas has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Spire has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Summary

Spire beats Piedmont Natural Gas on 9 of the 13 factors compared between the two stocks.

About Piedmont Natural Gas

Piedmont Natural Gas Company, Inc. is an energy services company. The Company’s principal business is the distribution of natural gas to residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities, which are its wholesale customers. The Company operates through three segments: regulated utility, regulated non-utility activities and unregulated non-utility activities. The regulated utility segment includes operating a natural gas distribution system. The regulated non-utility activities segment consists of its equity method investments in regulated energy-related joint ventures that are held by its subsidiaries. The unregulated non-utility activities segment consists primarily of its equity method investment in an unregulated energy-related joint venture that is held by its subsidiary.

About Spire

Spire Inc., formerly The Laclede Group, Inc., is engaged to transform its business and pursue growth by growing its gas utility business through prudent investment in infrastructure upgrades and organic growth initiatives; acquire and integrate gas utilities; modernize its gas assets, and invest in innovation. The Company has two business segments, which include gas utility and gas marketing. The gas utility segment includes the regulated operations of Laclede Gas Company (Laclede Gas), Alabama Gas Corporation (Alagasco) and EnergySouth, Inc. (EnergySouth). The gas marketing segment includes Laclede Energy Resources, Inc. (LER), a subsidiary engaged in the marketing of natural gas and related activities on a non-regulated basis. Laclede Gas is engaged in the purchase, retail distribution and sale of natural gas, serving residential, commercial and industrial customers, through Missouri Gas Energy (MGE), Kansas City and western Missouri.

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