ONEOK (NYSE: OKE) and RGC Resources (NASDAQ:RGCO) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.
Risk and Volatility
ONEOK has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, RGC Resources has a beta of -0.05, meaning that its share price is 105% less volatile than the S&P 500.
This table compares ONEOK and RGC Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
ONEOK pays an annual dividend of $3.08 per share and has a dividend yield of 5.2%. RGC Resources pays an annual dividend of $0.62 per share and has a dividend yield of 2.5%. ONEOK pays out 175.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RGC Resources pays out 72.1% of its earnings in the form of a dividend. ONEOK has raised its dividend for 15 consecutive years. ONEOK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
68.5% of ONEOK shares are owned by institutional investors. 0.5% of ONEOK shares are owned by insiders. Comparatively, 8.9% of RGC Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares ONEOK and RGC Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ONEOK||$12.17 billion||2.01||$387.84 million||$1.76||33.86|
|RGC Resources||$62.30 million||3.24||$6.23 million||$0.86||29.42|
ONEOK has higher revenue and earnings than RGC Resources. RGC Resources is trading at a lower price-to-earnings ratio than ONEOK, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for ONEOK and RGC Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ONEOK presently has a consensus price target of $60.86, suggesting a potential upside of 2.11%. RGC Resources has a consensus price target of $27.00, suggesting a potential upside of 6.72%. Given RGC Resources’ higher possible upside, analysts clearly believe RGC Resources is more favorable than ONEOK.
ONEOK beats RGC Resources on 11 of the 16 factors compared between the two stocks.
ONEOK Company Profile
ONEOK, Inc., through its general partner interests in ONEOK Partners, L.P., engages in the gathering, processing, storage, and transportation of natural gas in the United States. The company operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments. It owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions. The company also gathers, treats, fractionates, and transports natural gas liquids (NGL), as well as stores, markets, and distributes NGL products. It owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Missouri, Nebraska, Iowa, and Illinois; and NGL distribution and refined petroleum products pipelines in Kansas, Missouri, Nebraska, Iowa, Illinois, and Indiana, as well as owns and operates truck- and rail-loading, and -unloading facilities that interconnect with its NGL fractionation and pipeline assets. In addition, the company operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities. Further, it owns and operates a parking garage in downtown Tulsa, Oklahoma; and leases excess office space to others. The company serves integrated and independent exploration and production companies; NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; propane distributors; ethanol producers; and petrochemical, refining, and NGL marketing companies, as well as natural gas distribution companies, electric-generation facilities, industrial companies, municipalities, and marketing companies. ONEOK, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma.
RGC Resources Company Profile
RGC Resources, Inc., through its subsidiaries, operates as an energy services company. The company sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. It also provides various unregulated services. The company operates approximately 1,135 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility located in Botetourt County, as well as owns and operates 8 metering stations. RGC Resources, Inc. was founded in 1912 and is based in Roanoke, Virginia.
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