Head-To-Head Survey: Chesapeake Utilities (NYSE:CPK) vs. Northwest Natural Gas (NYSE:NWN)

Chesapeake Utilities (NYSE:CPK) and Northwest Natural Gas (NYSE:NWN) are both mid-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Earnings & Valuation

This table compares Chesapeake Utilities 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
Chesapeake Utilities	$930.00 million	3.69	$140.30 million	$6.34	22.15
Northwest Natural Gas	$1.29 billion	1.69	$113.32 million	$3.02	17.12

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

Institutional & Insider Ownership

83.1% of Chesapeake Utilities shares are held by institutional investors. Comparatively, 75.1% of Northwest Natural Gas shares are held by institutional investors. 1.4% of Chesapeake Utilities shares are held by company insiders. Comparatively, 0.6% of Northwest Natural Gas shares are held by company 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chesapeake Utilities	15.09%	9.21%	3.68%
Northwest Natural Gas	9.65%	8.23%	1.97%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Utilities	0	2	2	2	3.00
Northwest Natural Gas	0	5	3	2	2.70

Chesapeake Utilities presently has a consensus price target of $143.75, indicating a potential upside of 2.37%. Northwest Natural Gas has a consensus price target of $55.43, indicating a potential upside of 7.21%. Given Northwest Natural Gas’ higher possible upside, analysts plainly believe Northwest Natural Gas is more favorable than Chesapeake Utilities.

Dividends

Chesapeake Utilities pays an annual dividend of $2.94 per share and has a dividend yield of 2.1%. Northwest Natural Gas pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. Chesapeake Utilities pays out 46.4% of its earnings in the form of a dividend. Northwest Natural Gas pays out 66.2% 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. Chesapeake Utilities has increased its dividend for 22 consecutive years and Northwest Natural Gas has increased its dividend for 70 consecutive years. Northwest Natural Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Chesapeake Utilities has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, Northwest Natural Gas has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.

Summary

Chesapeake Utilities beats Northwest Natural Gas on 12 of the 17 factors compared between the two stocks.

About Chesapeake Utilities

Chesapeake Utilities Corporation is a diversified energy company that delivers natural gas, propane and electricity to residential, commercial and industrial customers. Its businesses also include natural gas transmission and distribution, energy generation, and renewable natural gas projects. The company serves customers across Delaware, Maryland, Florida and other parts of the Mid-Atlantic and Southeast. Its operations include regulated natural gas and electric utilities as well as unregulated propane distribution and energy-related services.

About Northwest Natural Gas

Northwest Natural Gas, now organized as NW Natural Holdings, is a utility company whose principal business is the distribution of natural gas through its NW Natural subsidiary. The company serves residential, commercial and industrial customers in Oregon and southwest Washington. Founded in 1859 as the Portland Gas Light Company, the business has grown from a local gas provider into a regional utility. Its operations also include natural gas storage and, through subsidiaries, water and wastewater services.