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Reasons to Add National Fuel Gas (NFG) to Your Portfolio Now
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National Fuel Gas (NFG - Free Report) benefits from its high-quality Appalachian assets and rising earnings estimates. Expanding upstream and midstream operations are other tailwinds.
Let us focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for fiscal 2024 and 2025 earnings per share has moved up 2.2% and 1.2%, respectively, in the past 60 days.
The Zacks Consensus Estimate for fiscal 2024 and 2025 sales indicates year-over-year growth of 3% and 15%, respectively.
Return on Equity & Dividend Yield
Return on Equity (ROE) indicates how efficiently National Fuel Gas is utilizing funds to generate returns. At present, National Fuel Gas’ ROE is 15.06%, higher than the industry average of 9.01%.
NFG has a dividend yield of 3.54% compared with the Zacks S&P 500 composite’s average of 1.6%.
Share Repurchase
Expanding operations of National Fuel Gas enables the company to generate a stable cash flow and allows management to carry on with its shareholder-friendly initiatives. The company has been paying dividends for the past 122 years. It has also raised the dividend rate consecutively over the past 54 years.
Debt to Capital
The current debt to capital of the company is 41.94% compared with its industry average of 43.83%. In a high interest rate environment, lower debts compared with the industry average is a positive for the company. This indicates National Fuel Gas can run its operation with lower debts compared to industry peers.
Regular Investments
Since 2010, NFG has invested $2.7 billion in midstream operations to expand and modernize its pipeline infrastructure to gain access to Appalachian production. The company plans to invest more than $500 million in the next five years for the modernization of pipeline transportation and distribution systems.
National Fuel Gas expects a capital expenditure of $885-$980 million for fiscal 2024. E&P capital expenditure was $588 million in fiscal 2023 and it is anticipated to be $525-$555 million in fiscal 2024. The planned investment will strengthen operations and assist the company in providing efficient services to its customers.
Price Performance
In the past 12 months, National Fuel Gas’ shares have returned 7.6% against the industry’s 1.3% decline.
Atmos Energy, UGI and NewJersey Resources delivered an average earnings surprise of 3.3%, 19.1%, and 107.4%, respectively, in the last four quarters.
The Zacks Consensus Estimate for fiscal 2024 earnings per share of Atmos Energy, UGI and NewJersey Resources, has increased 10.2%, 2.8% and 9.7% year over year, respectively.
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Reasons to Add National Fuel Gas (NFG) to Your Portfolio Now
National Fuel Gas (NFG - Free Report) benefits from its high-quality Appalachian assets and rising earnings estimates. Expanding upstream and midstream operations are other tailwinds.
Let us focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for fiscal 2024 and 2025 earnings per share has moved up 2.2% and 1.2%, respectively, in the past 60 days.
The Zacks Consensus Estimate for fiscal 2024 and 2025 sales indicates year-over-year growth of 3% and 15%, respectively.
Return on Equity & Dividend Yield
Return on Equity (ROE) indicates how efficiently National Fuel Gas is utilizing funds to generate returns. At present, National Fuel Gas’ ROE is 15.06%, higher than the industry average of 9.01%.
NFG has a dividend yield of 3.54% compared with the Zacks S&P 500 composite’s average of 1.6%.
Share Repurchase
Expanding operations of National Fuel Gas enables the company to generate a stable cash flow and allows management to carry on with its shareholder-friendly initiatives. The company has been paying dividends for the past 122 years. It has also raised the dividend rate consecutively over the past 54 years.
Debt to Capital
The current debt to capital of the company is 41.94% compared with its industry average of 43.83%. In a high interest rate environment, lower debts compared with the industry average is a positive for the company. This indicates National Fuel Gas can run its operation with lower debts compared to industry peers.
Regular Investments
Since 2010, NFG has invested $2.7 billion in midstream operations to expand and modernize its pipeline infrastructure to gain access to Appalachian production. The company plans to invest more than $500 million in the next five years for the modernization of pipeline transportation and distribution systems.
National Fuel Gas expects a capital expenditure of $885-$980 million for fiscal 2024. E&P capital expenditure was $588 million in fiscal 2023 and it is anticipated to be $525-$555 million in fiscal 2024. The planned investment will strengthen operations and assist the company in providing efficient services to its customers.
Price Performance
In the past 12 months, National Fuel Gas’ shares have returned 7.6% against the industry’s 1.3% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks in the same industry are Atmos Energy (ATO - Free Report) , UGI Corporation (UGI - Free Report) and NewJersey Resources (NJR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Atmos Energy, UGI and NewJersey Resources delivered an average earnings surprise of 3.3%, 19.1%, and 107.4%, respectively, in the last four quarters.
The Zacks Consensus Estimate for fiscal 2024 earnings per share of Atmos Energy, UGI and NewJersey Resources, has increased 10.2%, 2.8% and 9.7% year over year, respectively.