Critical Comparison: Regency Energy Partners (RGNC) & South Jersey Industries (NYSE:SJI)

Regency Energy Partners (NASDAQ: RGNC) and South Jersey Industries (NYSE:SJI) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitabiliy, valuation, dividends, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

69.6% of South Jersey Industries shares are owned by institutional investors. 0.6% of South Jersey Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

South Jersey Industries pays an annual dividend of $1.09 per share and has a dividend yield of 3.2%. Regency Energy Partners does not pay a dividend. South Jersey Industries pays out 98.2% 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 Regency Energy Partners and South Jersey Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regency Energy Partners -0.30% -0.47% -0.07%
South Jersey Industries 7.83% 8.04% 2.84%

Earnings and Valuation

This table compares Regency Energy Partners and South Jersey Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Regency Energy Partners N/A N/A N/A N/A N/A
South Jersey Industries $1.13 billion 2.36 $255.91 million $1.11 30.34

South Jersey Industries has higher revenue and earnings than Regency Energy Partners.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Regency Energy Partners and South Jersey Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regency Energy Partners 0 0 0 0 N/A
South Jersey Industries 0 4 1 0 2.20

South Jersey Industries has a consensus price target of $35.33, indicating a potential upside of 4.91%. Given South Jersey Industries’ higher probable upside, analysts plainly believe South Jersey Industries is more favorable than Regency Energy Partners.

Summary

South Jersey Industries beats Regency Energy Partners on 9 of the 10 factors compared between the two stocks.

About Regency Energy Partners

Regency Energy Partners LP gathers and processes, compress, treats and transports natural gas; transports, fractionates and stores natural gas liquids (NGLs); gathers, transports and terminals oil received from producers; gathers and disposes salt water, and manages coal and natural resource properties in the United States. The Company has six business segments: Gathering and Processing, Natural Gas Transportation, NGL Services, Contract Services, Natural Resources and Corporate. The Gathering and Processing segment provides wellhead-to-market services to producers of natural gas. The Natural Gas Transportation segment owns a 49.99% general partner interest in RIGS Haynesville Partnership Co. The NGL Services segment owns a 30% membership interest in Lone Star NGL LLC. The Contract Services segment owns and operates a fleet of compressors. The Natural Resources segment manages coal and natural resources properties. The Corporate segment includes its corporate assets.

About South Jersey Industries

South Jersey Industries, Inc. (SJI) is an energy services holding company. The Company provides a range of energy-related products and services, primarily through its subsidiaries. Its subsidiaries include South Jersey Gas Company (SJG), South Jersey Energy Company (SJE), South Jersey Resources Group, LLC (SJRG), South Jersey Exploration, LLC (SJEX), Marina Energy, LLC (Marina), South Jersey Energy Service Plus, LLC (SJESP) and SJI Midstream, LLC (Midstream). Its segments include Gas utility operations (SJG), which consist primarily of natural gas distribution; Wholesale energy operations, which include the activities of SJRG and SJEX; SJE, which is involved in both retail gas and retail electric activities; On-Site energy production, which consists of Marina’s thermal energy facility; Appliance service operations, which include SJESP, and Corporate and Services segment, which includes the activities of Midstream.

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