Critical Comparison: ONE Gas (OGS) and Its Peers

ONE Gas (NYSE: OGS) is one of 14 publicly-traded companies in the “Natural Gas Distribution” industry, but how does it compare to its competitors? We will compare ONE Gas to similar companies based on the strength of its institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Profitability

This table compares ONE Gas and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ONE Gas 10.42% 8.22% 3.22%
ONE Gas Competitors 4.18% -11.67% 3.49%

Volatility & Risk

ONE Gas has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500. Comparatively, ONE Gas’ competitors have a beta of 0.48, indicating that their average share price is 53% less volatile than the S&P 500.

Insider & Institutional Ownership

72.8% of ONE Gas shares are held by institutional investors. Comparatively, 65.4% of shares of all “Natural Gas Distribution” companies are held by institutional investors. 1.5% of ONE Gas shares are held by company insiders. Comparatively, 2.2% of shares of all “Natural Gas Distribution” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares ONE Gas and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
ONE Gas $1.43 billion $140.09 million 25.70
ONE Gas Competitors $2.04 billion $171.22 million 22.58

ONE Gas’ competitors have higher revenue and earnings than ONE Gas. ONE Gas is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings and price targets for ONE Gas and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ONE Gas 2 2 0 0 1.50
ONE Gas Competitors 59 208 227 5 2.36

ONE Gas currently has a consensus target price of $64.00, indicating a potential downside of 16.72%. As a group, “Natural Gas Distribution” companies have a potential upside of 1.97%. Given ONE Gas’ competitors stronger consensus rating and higher possible upside, analysts plainly believe ONE Gas has less favorable growth aspects than its competitors.

Dividends

ONE Gas pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. ONE Gas pays out 56.2% of its earnings in the form of a dividend. As a group, “Natural Gas Distribution” companies pay a dividend yield of 2.4% and pay out 62.3% of their earnings in the form of a dividend.

Summary

ONE Gas competitors beat ONE Gas on 10 of the 15 factors compared.

ONE Gas Company Profile

ONE Gas, Inc. is a regulated natural gas distribution utility in the United States. The Company provides natural gas distribution services. The Company distributes natural gas in Oklahoma, Kansas and Texas. The Company serves residential, commercial and industrial, transportation and wholesale and public authority customers. The Company’s natural gas distribution markets in terms of customers are Oklahoma City and Tulsa, Oklahoma; Kansas City, Wichita and Topeka, Kansas, and Austin and El Paso, Texas. As of December 31, 2016, its three divisions, Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, distribute natural gas to approximately 88%, 72% and 13% of the natural gas distribution customers in Oklahoma, Kansas and Texas, respectively. As of December 31, 2016, the Company had 50.4 billion cubic feet (Bcf) of natural gas storage capacity under lease with remaining terms ranging from 1 to 10 years and maximum allowable daily withdrawal capacity of approximately 1.3 Bcf.

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