National Fuel Gas Company’s NFG systematic capital investments to strengthen its natural gas and oil operations are likely to increase its total production and boost performance. Given its growth opportunities, NFG makes for a solid investment option in the utility sector.
The company currently sports a Zacks Rank #1 (Strong Buy). Let’s look at the factors that are driving the stock.
Growth Projections & Surprise History
The Zacks Consensus Estimate for NFG’s fiscal 2024 earnings per share has increased 10.1% in the past 60 days to $5.13.
The consensus estimate for fiscal fourth-quarter sales is pinned at $491.95 million, which indicates year-over-year growth of 33.3%.
NFG delivered an average earnings surprise of 9.8% in the last four quarters.
Dividend Yield
NFG has been paying dividends for the past 122 years. It has also consistently raised the dividend rate over the past 54 years. Its current dividend yield is 3.51%, which is better than the Zacks S&P 500 composite’s average of 1.3%.
Debt Position
National Fuel Gas’ debt to capital at the end of the second quarter was 46.32% compared with its industry average of 49.6%.
The time-to-interest earned ratio at the end of the fiscal third quarter of was four. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Return on Equity
National Fuel Gas’ current return on equity (ROE) is pinned at 14.8%, which is more than the industry average of 9.33%. ROE, a profitable measure, reflects how effectively a company is utilizing its shareholders’ funds in its operations to generate income.
Investments
NFG aims to invest in the range of $890-$970 million during fiscal 2024 to strengthen its natural gas and oil operations. These investments will positively impact the total production. Its total production has been consistently increasing since fiscal 2015.
National Fuel Gas has invested $2.7 billion in midstream operations since 2010 to further expand and modernize its pipeline infrastructure to gain access to Appalachian production.
Price Performance
Shares of NFG have gained 3.3% in the past three months compared with the industry’s 1.7% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the industry are Atmos Energy Corporation ATO, Northwest Natural Holding Company NWN and UGI Corporation UGI. Each of these stocks currently carries a Zacks Rank #2 (Buy). You can see the complete list of Zacks Rank #1 stocks here.
Atmos Energy Corporation delivered an average earnings surprise of 4.8% in the last four quarters. The Zacks Consensus Estimate for fiscal 2024 earnings indicates year-over-year growth of 11.3%.
Northwest Natural Holding Company delivered an average earnings surprise of 8.7% in the last four quarters. The consensus estimate for 2024 earnings has increased 1.8% in the past 30 days.
UGI Corporation delivered an average earnings surprise of 99.1% in the last four quarters. The Zacks Consensus Estimate for fiscal 2024 earnings indicates year-over-year growth of 2.8%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
