Comparing AltaGas (OTCMKTS:ATGFF) & RGC Resources (NASDAQ:RGCO)

AltaGas (OTCMKTS:ATGFF) and RGC Resources (NASDAQ:RGCO) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent recommendations and price targets for AltaGas and RGC Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AltaGas	0	0	6	0	3.00
RGC Resources	0	0	1	0	3.00

Dividends

AltaGas pays an annual dividend of $1.50 per share and has a dividend yield of 4.0%. RGC Resources pays an annual dividend of $0.87 per share and has a dividend yield of 4.0%. 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. RGC Resources pays out 64.9% of its earnings in the form of a dividend. RGC Resources has increased its dividend for 22 consecutive years. RGC Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares AltaGas and RGC Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AltaGas	N/A	N/A	N/A
RGC Resources	13.05%	11.85%	4.16%

Institutional and Insider Ownership

28.7% of AltaGas shares are held by institutional investors. Comparatively, 35.8% of RGC Resources shares are held by institutional investors. 7.2% of RGC Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares AltaGas and RGC Resources”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AltaGas	N/A	N/A	N/A	$1.10	34.30
RGC Resources	$95.33 million	2.36	$13.28 million	$1.34	16.11

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

Summary

RGC Resources beats AltaGas on 10 of the 12 factors compared between the two stocks.

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.

About RGC Resources

RGC Resources, Inc., through its subsidiaries, operates as an energy services company. It sells and distributes natural gas to residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding localities. The company also provides various unregulated services. It operates approximately 1,179 miles of transmission and distribution pipeline; and a liquefied natural gas storage facility, as well as owns and operates six metering stations. In addition, it produces biogas. RGC Resources, Inc. was founded in 1883 and is based in Roanoke, Virginia.