Head to Head Comparison: National Fuel Gas (NYSE:NFG) versus Southwest Gas (NYSE:SWX)

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

Volatility & Risk

Southwest Gas has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, National Fuel Gas has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Southwest Gas and National Fuel Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southwest Gas	0	1	6	0	2.86
National Fuel Gas	0	2	2	0	2.50

Southwest Gas currently has a consensus price target of $100.67, suggesting a potential upside of 13.54%. National Fuel Gas has a consensus price target of $105.50, suggesting a potential upside of 26.15%. Given National Fuel Gas’ higher possible upside, analysts clearly believe National Fuel Gas is more favorable than Southwest Gas.

Earnings and Valuation

This table compares Southwest Gas and National Fuel Gas”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southwest Gas	$1.94 billion	3.31	$439.83 million	$7.66	11.57
National Fuel Gas	$2.28 billion	3.49	$518.50 million	$7.20	11.62

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

Insider & Institutional Ownership

92.8% of Southwest Gas shares are held by institutional investors. Comparatively, 74.0% of National Fuel Gas shares are held by institutional investors. 0.6% of Southwest Gas shares are held by company insiders. Comparatively, 1.3% of National Fuel Gas shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southwest Gas	31.85%	6.79%	2.63%
National Fuel Gas	26.97%	19.04%	7.33%

Dividends

Southwest Gas pays an annual dividend of $2.58 per share and has a dividend yield of 2.9%. National Fuel Gas pays an annual dividend of $2.22 per share and has a dividend yield of 2.7%. Southwest Gas pays out 33.7% of its earnings in the form of a dividend. National Fuel Gas pays out 30.8% 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. National Fuel Gas has increased its dividend for 55 consecutive years.

Summary

National Fuel Gas beats Southwest Gas on 10 of the 17 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 National Fuel Gas

National Fuel Gas Company operates as a diversified energy company. It operates through four segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. The Exploration and Production segment explores for, develops, and produces natural gas and oil. The Pipeline and Storage segment provides interstate natural gas transportation services through an integrated gas pipeline system in Pennsylvania and New York; and owns and operates underground natural gas storage fields. This segment also transports natural gas for National Fuel Gas Distribution Corporation, as well as for other utilities, industrial companies, and power producers in New York State. The Gathering segment builds, owns, and operates natural gas processing and pipeline gathering facilities in the Appalachian region, as well as provides gathering services to Seneca. The Utility segment sells natural gas or provides natural gas utility services to various customers in Buffalo, Niagara Falls, and Jamestown, New York; and Erie and Sharon, Pennsylvania. National Fuel Gas Company was incorporated in 1902 and is headquartered in Williamsville, New York.