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OGS vs. SWX: Which Gas Distributor Stock Delivers Better Returns?
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Key Takeaways
SWX emerges ahead of OGS on earnings outlook, capex scale, debt levels and recent stock performance.
SWX's EPS is seen at $4.26 for 2026 and $4.82 for 2027; OGS at $4.73 and $4.94 with slower growth rates.
OGS has a higher ROE of 8.24% and 3.06% yield, while SWX holds lower 46.97% debt and a $6.3B capex plan.
The companies in the Zacks Utility - Gas Distribution industry offer services to transport natural gas from the region of production to millions of consumers across the United States. These utilities operate through extensive underground pipeline networks that deliver gas to millions of residential, commercial and industrial consumers. The regulated framework enables the companies to recover expenses through approved rate hikes and enhance shareholders’ value through dividends and buybacks.
The demand for natural gas is rising in the United States due to its clean-burning nature, which helps reduce emissions. Utilities utilize the widespread transmission and distribution lines and interstate pipelines to meet the demand from all customer groups.
Amid the rising importance of gas distribution, let us discuss ONE Gas, Inc. (OGS - Free Report) and Southwest Gas (SWX - Free Report) , two regulated utilities gaining from the rise in natural gas demand and major infrastructure development investments, making them comparable in the utility space.
ONE Gas, with its fully-regulated natural gas distribution framework, efficiently serves 2.3 million customers and supports rising residential demand. OGS manages 45,400 miles of natural gas distribution and transmission pipelines, and has 60.8 billion cubic feet (Bcf) of storage capacity. Its systematic capital investments in infrastructure development help maintain service reliability while enhancing operational efficiency and supporting long-term financial growth.
Southwest Gas is recognized as a regulated natural gas utility that serves 2.28 million customers and supports an expanding customer base, driven by regional economic development. SWX manages its operating pipeline transmission system through its wholly-owned subsidiary, Paiute Pipeline Company. It delivers natural gas to priority residential customers through Southwest Gas Holdings, Inc., under state regulatory commission guidelines. The company undertakes strategic capital investment to strengthen infrastructure, ensure consistent delivery across its expanding customer base and support long-term growth.
ONE Gas, Inc. and Southwest Gas are among the leading utilities. Examining their fundamentals side by side can reveal which stock presents the most attractive investment opportunity.
OGS & SWX’s Earnings Growth Projections
The Zacks Consensus Estimate for SWX’s earnings per share is pegged at $4.26 for 2026 and $4.82 for 2027, suggesting year-over-year growth of 16.71% and 13.15%, respectively. SWX’s long-term (three to five years) earnings growth is pinned at 9.16%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for OGS’s earnings per share is pegged at $4.73 for 2026 and $4.94 for 2027, suggesting year-over-year growth of 5.58% and 4.40%, respectively. OGS’s long-term earnings growth is pinned at 8.11%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive one and regular investment is required for infrastructure upgradation and maintenance to manage the operations efficiently, enhance reliability and support growing demand. These utilities combine internally generated cash flows with borrowed funds from capital markets to finance long-term investments, ensuring steady growth and reliable service delivery.
Southwest Gas’ debt-to-capital currently stands at 46.97% compared with ONE Gas’ 49.51%. Both companies are using debt to fund their business. Both SWX and OGS’s debt levels are lower than the industry’s 55.08%, with OGS higher, indicating a greater reliance on borrowed funds.
Image Source: Zacks Investment Research
ROE
Return on Equity (“ROE”) plays a significant role in measuring financial performance. It indicates how efficiently a company utilizes shareholders’ funds to generate returns. ROE reflects management's efficiency in using capital to grow earnings and enhance shareholder value.
ONE Gas’ current ROE is 8.24%, outperforming Southwest Gas, which reports a lower ROE of 6.62%. OGS utilizes shareholder capital more efficiently and generates higher profits, though both companies’ returns remain below the industry average of 9.31%.
OGS & SWX’s Dividend Yield
Dividends are regular payments distributed by a utility company to reward its shareholders and provide a direct return on their investment. It reflects the company’s financial stability, indicates strong cash flow and consistent earnings.
Currently, the dividend yield for ONE Gas is 3.06%, whereas that for Southwest Gas is 2.71%. The dividend yields for both companies are higher than the S&P 500’s yield of 1.39%
Capital Investment Plans
Utilities operation is capital-intensive as huge funds are required for infrastructure development, enhancing system reliability and maintaining the existing assets. Natural gas distribution utility requires continuous investment to maintain and upgrade pipelines, storage facilities and delivery infrastructure, ensuring safety and reliable customer service.
Southwest Gas aims to invest $6.3 billion in 2026-2030 to enhance service reliability for its expanding customer base and support infrastructure development. ONE Gas plans to invest $800-$900 million annually through 2030, totaling $4.3 billion over five years, supporting the company’s Vintage Pipeline Replacement Program and rate base growth.
Price Performance
Southwest Gas shares have gained 17.4% in the past six months compared with ONE Gas’s 9% rally.
Image Source: Zacks Investment Research
Summing Up
ONE Gas and Southwest Gas both gain from rising natural gas demand, expanding customer base, new rates and are making substantial infrastructure investments to serve millions of customers across the United States.
Southwest Gas’ stronger earnings estimate revisions, wider capital expenditure plan, lower debt-to-capital ratio and better price performance make it a more attractive choice in the utility sector.
View the Zacks #1 Rank List
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OGS vs. SWX: Which Gas Distributor Stock Delivers Better Returns?
Key Takeaways
The companies in the Zacks Utility - Gas Distribution industry offer services to transport natural gas from the region of production to millions of consumers across the United States. These utilities operate through extensive underground pipeline networks that deliver gas to millions of residential, commercial and industrial consumers. The regulated framework enables the companies to recover expenses through approved rate hikes and enhance shareholders’ value through dividends and buybacks.
The demand for natural gas is rising in the United States due to its clean-burning nature, which helps reduce emissions. Utilities utilize the widespread transmission and distribution lines and interstate pipelines to meet the demand from all customer groups.
Amid the rising importance of gas distribution, let us discuss ONE Gas, Inc. (OGS - Free Report) and Southwest Gas (SWX - Free Report) , two regulated utilities gaining from the rise in natural gas demand and major infrastructure development investments, making them comparable in the utility space.
ONE Gas, with its fully-regulated natural gas distribution framework, efficiently serves 2.3 million customers and supports rising residential demand. OGS manages 45,400 miles of natural gas distribution and transmission pipelines, and has 60.8 billion cubic feet (Bcf) of storage capacity. Its systematic capital investments in infrastructure development help maintain service reliability while enhancing operational efficiency and supporting long-term financial growth.
Southwest Gas is recognized as a regulated natural gas utility that serves 2.28 million customers and supports an expanding customer base, driven by regional economic development. SWX manages its operating pipeline transmission system through its wholly-owned subsidiary, Paiute Pipeline Company. It delivers natural gas to priority residential customers through Southwest Gas Holdings, Inc., under state regulatory commission guidelines. The company undertakes strategic capital investment to strengthen infrastructure, ensure consistent delivery across its expanding customer base and support long-term growth.
ONE Gas, Inc. and Southwest Gas are among the leading utilities. Examining their fundamentals side by side can reveal which stock presents the most attractive investment opportunity.
OGS & SWX’s Earnings Growth Projections
The Zacks Consensus Estimate for SWX’s earnings per share is pegged at $4.26 for 2026 and $4.82 for 2027, suggesting year-over-year growth of 16.71% and 13.15%, respectively. SWX’s long-term (three to five years) earnings growth is pinned at 9.16%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for OGS’s earnings per share is pegged at $4.73 for 2026 and $4.94 for 2027, suggesting year-over-year growth of 5.58% and 4.40%, respectively. OGS’s long-term earnings growth is pinned at 8.11%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive one and regular investment is required for infrastructure upgradation and maintenance to manage the operations efficiently, enhance reliability and support growing demand. These utilities combine internally generated cash flows with borrowed funds from capital markets to finance long-term investments, ensuring steady growth and reliable service delivery.
Southwest Gas’ debt-to-capital currently stands at 46.97% compared with ONE Gas’ 49.51%. Both companies are using debt to fund their business. Both SWX and OGS’s debt levels are lower than the industry’s 55.08%, with OGS higher, indicating a greater reliance on borrowed funds.
Image Source: Zacks Investment Research
ROE
Return on Equity (“ROE”) plays a significant role in measuring financial performance. It indicates how efficiently a company utilizes shareholders’ funds to generate returns. ROE reflects management's efficiency in using capital to grow earnings and enhance shareholder value.
ONE Gas’ current ROE is 8.24%, outperforming Southwest Gas, which reports a lower ROE of 6.62%. OGS utilizes shareholder capital more efficiently and generates higher profits, though both companies’ returns remain below the industry average of 9.31%.
OGS & SWX’s Dividend Yield
Dividends are regular payments distributed by a utility company to reward its shareholders and provide a direct return on their investment. It reflects the company’s financial stability, indicates strong cash flow and consistent earnings.
Currently, the dividend yield for ONE Gas is 3.06%, whereas that for Southwest Gas is 2.71%. The dividend yields for both companies are higher than the S&P 500’s yield of 1.39%
Capital Investment Plans
Utilities operation is capital-intensive as huge funds are required for infrastructure development, enhancing system reliability and maintaining the existing assets. Natural gas distribution utility requires continuous investment to maintain and upgrade pipelines, storage facilities and delivery infrastructure, ensuring safety and reliable customer service.
Southwest Gas aims to invest $6.3 billion in 2026-2030 to enhance service reliability for its expanding customer base and support infrastructure development. ONE Gas plans to invest $800-$900 million annually through 2030, totaling $4.3 billion over five years, supporting the company’s Vintage Pipeline Replacement Program and rate base growth.
Price Performance
Southwest Gas shares have gained 17.4% in the past six months compared with ONE Gas’s 9% rally.
Image Source: Zacks Investment Research
Summing Up
ONE Gas and Southwest Gas both gain from rising natural gas demand, expanding customer base, new rates and are making substantial infrastructure investments to serve millions of customers across the United States.
Southwest Gas’ stronger earnings estimate revisions, wider capital expenditure plan, lower debt-to-capital ratio and better price performance make it a more attractive choice in the utility sector.
Based on the above discussion, Southwest Gas currently has an edge over ONE Gas, though both presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.