NasdaqGM:RGCO

Stock Analysis Report

Executive Summary

RGC Resources, Inc., through its subsidiaries, operates as an energy services company.

Rewards

Earnings grew by 19.2% over the past year

Pays a reliable dividend of 2.38%

Risk Analysis

Debt is not well covered by operating cash flow

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record average dividend payer.


Similar Companies

Share Price & News

How has RGC Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RGCO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.2%

RGCO

1.1%

US Gas Utilities

0.6%

US Market


1 Year Return

6.2%

RGCO

-6.0%

US Gas Utilities

20.8%

US Market

Return vs Industry: RGCO exceeded the US Gas Utilities industry which returned -6% over the past year.

Return vs Market: RGCO underperformed the US Market which returned 20.8% over the past year.


Shareholder returns

RGCOIndustryMarket
7 Day0.2%1.1%0.6%
30 Day-0.07%1.1%2.5%
90 Day1.6%-6.3%4.9%
1 Year8.7%6.2%-3.6%-6.0%23.5%20.8%
3 Year89.8%76.8%23.0%14.0%46.5%37.0%
5 Year133.3%102.2%57.2%37.5%64.6%46.5%

Price Volatility Vs. Market

How volatile is RGC Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is RGC Resources undervalued compared to its fair value and its price relative to the market?

27.15x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RGCO ($29.38) is trading above our estimate of fair value ($16.08)

Significantly Below Fair Value: RGCO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RGCO is poor value based on its PE Ratio (27.2x) compared to the Gas Utilities industry average (24.8x).

PE vs Market: RGCO is poor value based on its PE Ratio (27.2x) compared to the US market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RGCO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RGCO is overvalued based on its PB Ratio (2.9x) compared to the US Gas Utilities industry average (2.2x).


Next Steps

Future Growth

How is RGC Resources forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

13.4%

Forecasted Utilities industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as RGC Resources has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has RGC Resources performed over the past 5 years?

12.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RGCO has high quality earnings.

Growing Profit Margin: RGCO's current net profit margins (12.8%) are higher than last year (11.1%).


Past Earnings Growth Analysis

Earnings Trend: RGCO's earnings have grown by 12.8% per year over the past 5 years.

Accelerating Growth: RGCO's earnings growth over the past year (19.2%) exceeds its 5-year average (12.8% per year).

Earnings vs Industry: RGCO earnings growth over the past year (19.2%) exceeded the Gas Utilities industry -8.6%.


Return on Equity

High ROE: RGCO's Return on Equity (10.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RGC Resources's financial position?


Financial Position Analysis

Short Term Liabilities: RGCO's short term assets ($16.4M) do not cover its short term liabilities ($21.6M).

Long Term Liabilities: RGCO's short term assets ($16.4M) do not cover its long term liabilities ($153.6M).


Debt to Equity History and Analysis

Debt Level: RGCO's debt to equity ratio (125.5%) is considered high.

Reducing Debt: RGCO's debt to equity ratio has increased from 75.8% to 125.5% over the past 5 years.

Debt Coverage: RGCO's debt is not well covered by operating cash flow (14.1%).

Interest Coverage: RGCO's interest payments on its debt are well covered by EBIT (3.2x coverage).


Balance Sheet

Inventory Level: RGCO has a high level of physical assets or inventory.

Debt Coverage by Assets: RGCO's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is RGC Resources's current dividend yield, its reliability and sustainability?

2.38%

Current Dividend Yield


Upcoming Dividend Payment

Purchase RGC Resources before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: RGCO's dividend (2.38%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: RGCO's dividend (2.38%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

Stable Dividend: RGCO's dividends per share have been stable in the past 10 years.

Growing Dividend: RGCO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (61%), RGCO's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of RGC Resources's salary, the management and board of directors tenure and is there insider trading?

5.8yrs

Average management tenure


CEO

John D'Orazio (59yo)

5.8yrs

Tenure

US$1,459,285

Compensation

Mr. John S. D'Orazio has been Chief Executive Officer, President and Director at RGC Resources, Inc. since February 3, 2014. Mr. D'Orazio serves as a Director of Roanoke Gas Company. Mr. D'Orazio served as ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD1.46M) is above average for companies of similar size in the US market ($USD1.11M).

Compensation vs Earnings: John's compensation has increased by more than 20% in the past year.


Management Age and Tenure

5.8yrs

Average Tenure

54.5yo

Average Age

Experienced Management: RGCO's management team is seasoned and experienced (5.8 years average tenure).


Board Age and Tenure

17.9yrs

Average Tenure

67yo

Average Age

Experienced Board: RGCO's board of directors are seasoned and experienced ( 17.9 years average tenure).


Insider Trading

Insider Buying: RGCO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$2,33303 Dec 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares80.34
Max PriceUS$29.04
BuyUS$1,50003 Dec 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares51.65
Max PriceUS$29.04
BuyUS$2,33304 Nov 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares78.45
Max PriceUS$29.74
BuyUS$1,50004 Nov 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares50.44
Max PriceUS$29.74
BuyUS$2,33302 Oct 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares80.7
Max PriceUS$28.91
BuyUS$1,50002 Oct 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares51.89
Max PriceUS$28.91
BuyUS$2,33304 Sep 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares84.16
Max PriceUS$27.72
BuyUS$1,50004 Sep 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares54.11
Max PriceUS$27.72
BuyUS$2,33302 Aug 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares82.5
Max PriceUS$28.28
BuyUS$1,50002 Aug 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares53.04
Max PriceUS$28.28
BuyUS$2,33302 Jul 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares78.05
Max PriceUS$29.89
BuyUS$1,50002 Jul 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares50.18
Max PriceUS$29.89
BuyUS$2,33304 Jun 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares84.1
Max PriceUS$27.74
BuyUS$1,50004 Jun 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares54.07
Max PriceUS$27.74
BuyUS$2,33302 May 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares87.31
Max PriceUS$26.72
BuyUS$1,50002 May 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares56.14
Max PriceUS$26.72
BuyUS$2,33302 Apr 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares89.39
Max PriceUS$26.10
BuyUS$1,50002 Apr 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares57.47
Max PriceUS$26.10
BuyUS$1,50004 Mar 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares53.1
Max PriceUS$28.25
BuyUS$1,50004 Feb 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares53
Max PriceUS$28.30
BuyUS$2,33303 Jan 19
Raymond Smoot
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares78.29
Max PriceUS$29.80
BuyUS$1,50003 Jan 19
Nancy Agee
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares50.34
Max PriceUS$29.80

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.1%.


Management Team

  • John D'Orazio (59yo)

    CEO, President & Director

    • Tenure: 5.8yrs
    • Compensation: US$1.46m
  • Robert Wells (55yo)

    VP & Chief Information Officer

    • Tenure: 0.8yrs
    • Compensation: US$772.34k
  • Paul Nester (44yo)

    VP, Treasurer

    • Tenure: 7.6yrs
    • Compensation: US$742.57k
  • Carl Shockley (54yo)

    VP & COO at Roanoke Gas Company

    • Tenure: 0yrs
    • Compensation: US$837.39k

Board Members

  • Thomas Crawford (64yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$51.50k
  • John Williamson (65yo)

    Independent Chairman of the Board

    • Tenure: 17.9yrs
    • Compensation: US$60.50k
  • Ab Boxley (61yo)

    Independent Director

    • Tenure: 25.9yrs
    • Compensation: US$53.50k
  • J. Layman (67yo)

    Independent Director

    • Tenure: 28.9yrs
    • Compensation: US$47.50k
  • S. Smith (71yo)

    Independent Director

    • Tenure: 29.9yrs
    • Compensation: US$60.50k
  • John D'Orazio (59yo)

    CEO, President & Director

    • Tenure: 5.8yrs
    • Compensation: US$1.46m
  • Maryellen Goodlatte (67yo)

    Independent Director

    • Tenure: 18.9yrs
    • Compensation: US$52.50k
  • Ray Smoot (72yo)

    Independent Director

    • Tenure: 14.9yrs
    • Compensation: US$61.50k
  • Nancy Agee (67yo)

    Independent Director

    • Tenure: 14.9yrs
    • Compensation: US$47.50k

Company Information

RGC Resources, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: RGC Resources, Inc.
  • Ticker: RGCO
  • Exchange: NasdaqGM
  • Founded: 1912
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: US$230.635m
  • Shares outstanding: 8.08m
  • Website: https://www.rgcresources.com

Number of Employees


Location

  • RGC Resources, Inc.
  • 519 Kimball Avenue, N.E.
  • Roanoke
  • Virginia
  • 24016
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RGCONasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDJan 1975

Biography

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, Virgini ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 23:49
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.