Analyzing AltaGas (OTCMKTS:ATGFF) & Northwest Natural Gas (NYSE:NWN)

AltaGas (OTCMKTS:ATGFF) and Northwest Natural Gas (NYSE:NWN) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Dividends

AltaGas pays an annual dividend of $1.50 per share and has a dividend yield of 3.9%. Northwest Natural Gas pays an annual dividend of $1.97 per share and has a dividend yield of 3.9%. AltaGas pays out 136.8% 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 pays out 65.7% of its earnings in the form of a dividend. Northwest Natural Gas has raised its dividend for 70 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for AltaGas and Northwest Natural Gas, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AltaGas	0	0	6	0	3.00
Northwest Natural Gas	0	3	3	1	2.71

Northwest Natural Gas has a consensus price target of $55.25, indicating a potential upside of 9.55%. Given Northwest Natural Gas’ higher possible upside, analysts plainly believe Northwest Natural Gas is more favorable than AltaGas.

Profitability

This table compares AltaGas and Northwest Natural Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AltaGas	N/A	N/A	N/A
Northwest Natural Gas	9.75%	8.33%	2.03%

Earnings & Valuation

This table compares AltaGas and Northwest Natural Gas”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AltaGas	N/A	N/A	N/A	$1.10	34.70
Northwest Natural Gas	$1.29 billion	1.64	$113.32 million	$3.00	16.81

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

Institutional and Insider Ownership

28.7% of AltaGas shares are owned by institutional investors. Comparatively, 75.1% of Northwest Natural Gas shares are owned by institutional investors. 0.5% of Northwest Natural Gas shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Northwest Natural Gas beats AltaGas on 11 of the 15 factors compared between the two stocks.

About AltaGas

AltaGas Ltd. operates as an energy infrastructure company in North America. The company operates through Utilities and Midstream segments. The Utilities segment owns and operates franchised, cost-of-service, rate-regulated natural gas distribution and storage utilities in Maryland, Virginia, Delaware, Pennsylvania, Ohio, and the District of Columbia serving approximately 1.6 million customers. This segment also provides interstate natural gas transportation and storage services. The Midstream segment engages in the natural gas gathering, processing, and extraction with 1.2 billion cubic feet per day (Bcf/d) of extraction processing capacity and approximately 1.2 Bcf/d of raw field gas processing capacity; fractionation and liquids handling business; and natural gas and natural gas liquids marketing activities. It also engages in LPG exports and distribution, logistics, trucking and rail terminals, and liquid storage businesses. In addition, the company operates gas-fired power generation and distribution assets with a generating capacity of 508 megawatt of power in California. It serves residential, commercial, and industrial customers. AltaGas Ltd. was founded in 1994 and is headquartered in Calgary, Canada.

About Northwest Natural Gas

Northwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, and industrial customers in the United States. The company operates a mist gas storage facility contracted to other utilities, third-party marketers, and electric generators; offers natural gas asset management services; and operates an appliance retail center. It also engages in gas storage, water and wastewater, non-regulated renewable natural gas, and other investment businesses. In addition, the company provides natural gas service in Oregon and southwest Washington; and water and wastewater connections. Northwest Natural Holding Company was founded in 1859 and is headquartered in Portland, Oregon.