Head-To-Head Review: AltaGas (OTCMKTS:ATGFF) & Southwest Gas (NYSE:SWX)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southwest Gas	$1.94 billion	3.34	$439.83 million	$6.90	12.97
AltaGas	N/A	N/A	N/A	$1.10	36.48

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

Insider and Institutional Ownership

92.8% of Southwest Gas shares are held by institutional investors. Comparatively, 28.7% of AltaGas shares are held by institutional investors. 0.6% of Southwest Gas shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Southwest Gas and AltaGas, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southwest Gas	0	1	5	2	3.12
AltaGas	0	0	6	0	3.00

Southwest Gas presently has a consensus price target of $97.29, indicating a potential upside of 8.70%. Given Southwest Gas’ stronger consensus rating and higher possible upside, equities analysts clearly believe Southwest Gas is more favorable than AltaGas.

Dividends

Southwest Gas pays an annual dividend of $2.58 per share and has a dividend yield of 2.9%. AltaGas pays an annual dividend of $1.50 per share and has a dividend yield of 3.7%. Southwest Gas pays out 37.4% of its earnings in the form of a dividend. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southwest Gas	19.95%	6.95%	2.58%
AltaGas	N/A	N/A	N/A

Summary

Southwest Gas beats AltaGas on 11 of the 14 factors compared between the two stocks.

About Southwest Gas

Southwest Gas Holdings, Inc., through its subsidiaries, distributes and transports natural gas in Arizona, Nevada, and California. The company operates through Natural Gas Distribution, Utility Infrastructure Services, and Pipeline and Storage segments. It also provides trenching, installation, and replacement of underground pipes, as well as maintenance services for energy distribution systems. As of December 31, 2023, it had 2,226,000 residential, commercial, industrial, and other natural gas customers. Southwest Gas Holdings, Inc. was incorporated in 1931 and is headquartered in Las Vegas, Nevada.

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.