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Northwest Natural Gas (NWN)
NYSE:NWN
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Northwest Gas
(NYSE:NWN)
71Outperform
Positive Factors
Acquisitions
NWN completed the acquisition of SiEnergy, which increased revenue more than expected.
Dividend
NWN increased its quarterly dividend by 0.5% to $0.49, aligning with forecasts, and the current annualized dividend yield is 4.8%.
Regulatory Approvals
NWN received an increase in its average rate base of $334M from regulators in Oregon.
Negative Factors
Customer Growth
Forecasts for lower customer growth in NWN's core natural gas service territories in Oregon and Washington.
Debt
NWN's debt-to-capital ratio increased to 61.3%, up from 57.6% in the prior quarter.
Debt Rating
S&P Global downgraded the debt rating on NWN to A-, from A.
Northwest Gas (NWN) vs. S&P 500 (SPY)
Market Cap
$1.67B
Dividend Yield4.76%
Average Volume (3M)346.04K
Price to Earnings (P/E)16.3
Beta (1Y)0.29
Revenue Growth3.88%
EPS Growth11.80%
CountryUS
Employees1,452
SectorUtilities
Sector Strength83
IndustryRegulated Gas
Share Statistics
EPS (TTM)2.28
Shares Outstanding40,309,760
10 Day Avg. Volume335,502
30 Day Avg. Volume346,042
Financial Highlights & Ratios
PEG Ratio-14.59
Price to Book (P/B)1.19
Price to Sales (P/S)0.00
P/FCF Ratio-8.89
Enterprise Value/Market Cap2.18
Enterprise Value/Revenue0.79
Enterprise Value/Gross Profit7.48
Enterprise Value/Ebitda2.64
Forecast
1Y Price Target
$46.00Price Target Upside10.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Northwest Gas Business Overview & Revenue Model
Company DescriptionNorthwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, industrial, and transportation customers in Oregon and Southwest Washington. The company also operates 5.7 billion cubic feet of the Mist gas storage facility contracted to other utilities and third-party marketers; offers natural gas asset management services; and operates an appliance retail center. In addition, it engages in the gas storage, water, non-regulated renewable natural gas, and other investments and activities. The company provides natural gas service through approximately 786,000 meters in Oregon and southwest Washington; and water services to a total of approximately 80,000 people through approximately 33,000 water and wastewater connections in the Pacific Northwest and Texas. Northwest Natural Holding Company was founded in 1859 and is headquartered in Portland, Oregon.
How the Company Makes MoneyNorthwest Gas makes money primarily through the sale and distribution of natural gas to its customer base, which includes residential, commercial, and industrial sectors. The company generates revenue by charging for the natural gas consumed by its customers, based on metered usage. Additionally, NWN may earn income from service charges, connection fees, and maintenance services related to its energy infrastructure. The company may also engage in strategic partnerships or agreements with other energy providers and infrastructure companies to optimize its distribution network and expand its market reach. Regulatory frameworks and rate adjustments set by state utility commissions can also impact NWN's revenue by influencing the pricing structures for natural gas distribution.
Northwest Gas Financial Statement Overview
Summary
Northwest Gas demonstrates stable financial health with consistent revenue growth and profitability margins. The balance sheet reflects a sound financial position with stable leverage and improved equity ratios, while cash flow management shows resilience despite negative free cash flow due to high capital expenditures.Income Statement
Revenue growth has been positive over the years, but the absence of current revenue data for 2024 limits analysis. The net profit margin decreased slightly from 7.84% in 2022 to 7.84% in 2023, indicating stable profitability despite challenges. EBIT and EBITDA margins have shown consistency, suggesting efficient operational management.45
Neutral
Balance Sheet
The debt-to-equity ratio has stayed relatively stable over the years, decreasing slightly from 1.93 in 2019 to 1.26 in 2023, pointing to a manageable leverage level. The equity ratio improved from 25.27% in 2019 to 26.45% in 2023, indicating a stronger financial position. Return on equity increased from 7.13% in 2020 to 7.31% in 2023, showing improved shareholder returns.55
Neutral
Cash Flow
Operating cash flow has been relatively stable, with a slight decrease in 2024. Free cash flow remains negative, yet the operating cash flow to net income ratio improved over time, indicating better cash generation relative to profits. Capital expenditures have increased, impacting free cash flow negatively.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.15B | 1.20B | 1.04B | 860.40M | 773.68M | Gross Profit |
| 397.61M | 423.87M | 341.23M | 329.12M | 300.50M | EBIT |
| 191.14M | 184.94M | 167.48M | 163.12M | 148.35M | EBITDA |
| 348.09M | 344.49M | 303.37M | 264.09M | 238.09M | Net Income Common Stockholders |
| 78.87M | 93.87M | 86.30M | 78.67M | 76.78M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 38.49M | 32.92M | 29.27M | 18.56M | 30.17M | Total Assets |
| 5.30B | 4.87B | 4.75B | 4.06B | 3.76B | Total Debt |
| 1.96B | 1.75B | 1.68B | 1.52B | 1.34B | Net Debt |
| 1.92B | 1.71B | 1.65B | 1.50B | 1.31B | Total Liabilities |
| 3.85B | 3.58B | 3.57B | 3.13B | 2.87B | Stockholders Equity |
| 1.39B | 1.28B | 1.18B | 935.15M | 888.73M |
| Cash Flow | Free Cash Flow | |||
| -194.12M | -47.40M | -191.69M | -134.90M | -137.87M | Operating Cash Flow |
| 200.28M | 279.95M | 147.67M | 160.35M | 143.02M | Investing Cash Flow |
| -428.99M | -335.50M | -435.46M | -300.12M | -294.28M | Financing Cash Flow |
| 227.06M | 64.21M | 301.63M | 131.44M | 171.78M |
Northwest Gas Technical Analysis
Neutral
41.54
Price Trends
41.83
Negative
40.74
Positive
39.90
Positive
Market Momentum
-0.27
Positive
46.47
Neutral
38.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWN, the sentiment is Neutral. The current price of 41.54 is below the 20-day moving average (MA) of 42.60, below the 50-day MA of 41.83, and above the 200-day MA of 39.90, indicating a neutral trend. The MACD of -0.27 indicates Positive momentum. The RSI at 46.47 is Neutral, neither overbought nor oversold. The STOCH value of 38.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NWN.
Northwest Gas Risk Analysis
Northwest Gas disclosed 35 risk factors in its most recent earnings report. Northwest Gas reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Northwest Gas Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $4.33B | 18.09 | 7.30% | 4.20% | -7.10% | 2.54% | |
72 Outperform | $4.54B | 18.19 | 8.08% | 3.52% | 7.73% | 2.36% | |
71 Outperform | $1.67B | 16.31 | 7.36% | 4.76% | 3.88% | 11.80% | |
71 Outperform | $4.73B | 11.30 | 17.83% | 3.80% | 20.30% | 63.69% | |
67 Neutral | $2.91B | 22.79 | 9.04% | 2.08% | 20.41% | 13.64% | |
63 Neutral | $8.57B | 10.13 | 4.66% | 4.38% | 3.79% | -12.91% | |
61 Neutral | $5.13B | 22.13 | 6.49% | 3.59% | -10.78% | 16.27% |
* Utilities Sector Average
Performance Comparison
NWN
Northwest Gas
41.54
4.64
12.57%
CPK
Chesapeake Utilities
124.90
14.88
13.52%
SR
Spire
74.45
14.35
23.88%
NJR
New Jersey Resources
47.08
4.23
9.87%
SWX
Southwest Gas
71.35
-3.82
-5.08%
OGS
ONE Gas
75.73
14.14
22.96%
Northwest Gas Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: -4.62%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial and operational start to 2025 with significant growth in customer base and strategic acquisitions enhancing future potential. Some challenges remain in managing expenses and navigating regulatory processes.Q1-2025 Updates
Positive Updates
Strong Q1 Financial Performance
Northwest Natural Holdings reported adjusted net income of $91.8 million or $2.28 per share for Q1 2025, up from $63.8 million or $1.69 per share in Q1 2024.
Utility Customer Growth
The combined utility customer growth rate was 9.6%, driven by the acquisition of Sea Energy, which added about 73,000 gas meters in Texas.
Sea Energy and Hughes Acquisition
The acquisition of Sea Energy and the planned purchase of Hughes Gas Resources are contributing to strong customer growth and operational synergies in Texas.
Renewables Business Performance
Renewable natural gas projects with EDL began operations last year, meeting expectations and providing steady cash flows and earnings.
Recognition for Ethical Business Practices
Northwest Natural Holdings was named one of the 2025 World's Most Ethical Companies by Ethisphere for the fourth consecutive year.
Negative Updates
Increased Expenses
Higher depreciation and interest expenses partially offset the company's strong financial performance.
Rate Case and Regulatory Challenges
A general rate case was filed in Oregon to recover critical investments, with the outcome pending over a 10-month adjudication period.
Company Guidance
During the Q1 2025 earnings call, Northwest Natural Holdings provided guidance indicating that their financial performance is aligned with their full-year expectations. The company reported an adjusted net income of $2.28 per share for Q1, up from $1.69 per share in the same period last year. Key drivers included new rates for the Northwest Natural Gas utility and the acquisition of Sea Energy, which contributed to a combined utility customer growth rate of 9.6%. Sea Energy added approximately 73,000 gas meters, and the Northwest Natural Water utility experienced a 5.9% customer growth. The company reaffirmed its 2025 EPS guidance range of $2.75 to $2.95 and projected organic customer growth between 2% and 2.5%. Capital expenditures for 2025 are expected to be between $450 million and $500 million, with plans to modernize infrastructure and expand in Texas. The company also anticipates maintaining a strong balance sheet, with equity issuances expected in the range of $65 million to $75 million.Northwest Gas Corporate Events
M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
Northwest Gas Reports Strong Q1 2025 Financial Results
Positive
May 6, 2025
On May 6, 2025, NW Natural Holdings reported strong financial results for the first quarter of 2025, with earnings per share increasing to $2.18 from $1.69 in the same period of 2024. The company completed the acquisition of SiEnergy, a Texas-based gas utility, in January 2025 and signed an agreement to acquire Hughes Gas Resources, further expanding its Texas operations. NW Natural Holdings reaffirmed its 2025 adjusted EPS guidance and long-term growth targets, highlighting its strategic focus on expanding utility services and maintaining shareholder value. The company also declared a quarterly dividend, emphasizing its commitment to returning value to shareholders.
Spark’s Take on NWN Stock
According to Spark, TipRanks’ AI Analyst, NWN is a Neutral.
Northwest Gas’s overall score reflects a stable financial standing with consistent revenue and profitability, supported by sound technical indicators and reasonable valuation metrics. The company’s strategic acquisitions and projected growth enhance its long-term prospects, yet regulatory challenges and high capital expenditures pose risks to near-term earnings.
To see Spark’s full report on NWN stock, click here.
M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
Northwest Gas Reports 2024 Financial Results and Acquisitions
Neutral
Feb 28, 2025
Northwest Natural Holding Company reported its financial results for 2024, showing a decline in net income to $2.03 per share from $2.59 per share in 2023, primarily due to regulatory lag until new gas utility rates were effective in November 2024. The company completed the acquisition of SiEnergy, invested significantly in utility systems, and increased its dividend for the 69th consecutive year. Looking forward, NW Natural Holdings initiated 2025 earnings guidance and reaffirmed its long-term EPS growth target, while planning substantial capital expenditures to support infrastructure and service expansion.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.