ONE Gas (NYSE:OGS) & GAIL (India) (OTCMKTS:GAILF) Critical Survey

GAIL (India) (OTCMKTS:GAILF) and ONE Gas (NYSE:OGS) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Dividends

GAIL (India) pays an annual dividend of $60.15 per share and has a dividend yield of 931.0%. ONE Gas pays an annual dividend of $2.72 per share and has a dividend yield of 3.4%. GAIL (India) pays out 26.6% of its earnings in the form of a dividend. ONE Gas pays out 58.6% 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. ONE Gas has raised its dividend for 2 consecutive years. GAIL (India) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for GAIL (India) and ONE Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAIL (India)	0	0	0	0	0.00
ONE Gas	0	6	6	0	2.50

ONE Gas has a consensus price target of $89.14, suggesting a potential upside of 10.02%. Given ONE Gas’ stronger consensus rating and higher probable upside, analysts plainly believe ONE Gas is more favorable than GAIL (India).

Insider & Institutional Ownership

0.4% of GAIL (India) shares are held by institutional investors. Comparatively, 88.7% of ONE Gas shares are held by institutional investors. 0.9% of ONE Gas shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares GAIL (India) and ONE Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAIL (India)	N/A	N/A	N/A
ONE Gas	12.47%	8.81%	3.45%

Valuation & Earnings

This table compares GAIL (India) and ONE Gas”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAIL (India)	N/A	N/A	N/A	$226.38	0.03
ONE Gas	$2.43 billion	2.10	$264.22 million	$4.64	17.46

ONE Gas has higher revenue and earnings than GAIL (India). GAIL (India) is trading at a lower price-to-earnings ratio than ONE Gas, indicating that it is currently the more affordable of the two stocks.

Summary

ONE Gas beats GAIL (India) on 11 of the 14 factors compared between the two stocks.

About GAIL (India)

GAIL (India) Limited operates as a natural gas processing and distribution company in India and internationally. The company operates through Transmission Services, Natural Gas Marketing, Petrochemicals, LPG and Other Liquid Hydrocarbons, and Other segments. It is involved in the transmission and marketing of natural gas to the power, fertilizer, industrial, automotive, petrochemicals, and domestic and commercial sectors. The company also markets liquefied petroleum gas (LPG), propane, pentane, naphtha, mixed fuel oil, polyethylene, and polypropylene; and manufactures petrochemicals, such as high-density polyethylene and linear low-density polyethylene under the brand names of G-Lex and G-Lene. In addition, it generates wind and solar power. Further, the company engages in the chartering of LNG vessels. The company was incorporated in 1984 and is based in New Delhi, India.

About ONE Gas

ONE Gas, Inc., together with its subsidiaries, operates as a regulated natural gas distribution company in the United States. The company provides natural gas distribution services to approximately 2.3 million customers in Oklahoma, Kansas, and Texas. It serves residential, commercial, and transportation customers. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.