Head-To-Head Analysis: Northwest Natural Gas (NWN) vs. Its Competitors

Northwest Natural Gas (NYSE: NWN) is one of 11 public companies in the “Natural gas distribution” industry, but how does it weigh in compared to its peers? We will compare Northwest Natural Gas to similar companies based on the strength of its analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Insider and Institutional Ownership

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68.0% of Northwest Natural Gas shares are held by institutional investors. Comparatively, 72.1% of shares of all “Natural gas distribution” companies are held by institutional investors. 1.5% of Northwest Natural Gas shares are held by insiders. Comparatively, 1.7% of shares of all “Natural gas distribution” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Northwest Natural Gas and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Natural Gas 2 4 0 0 1.67
Northwest Natural Gas Competitors 91 260 227 10 2.27

Northwest Natural Gas presently has a consensus target price of $59.33, suggesting a potential upside of 2.21%. As a group, “Natural gas distribution” companies have a potential upside of 5.42%. Given Northwest Natural Gas’ peers stronger consensus rating and higher probable upside, analysts plainly believe Northwest Natural Gas has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares Northwest Natural Gas and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Northwest Natural Gas $762.17 million -$55.62 million 25.92
Northwest Natural Gas Competitors $10.51 billion $337.54 million 21.56

Northwest Natural Gas’ peers have higher revenue and earnings than Northwest Natural Gas. Northwest Natural Gas is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Northwest Natural Gas pays an annual dividend of $1.89 per share and has a dividend yield of 3.3%. Northwest Natural Gas pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Natural gas distribution” companies pay a dividend yield of 2.9% and pay out 64.4% of their earnings in the form of a dividend. Northwest Natural Gas has raised its dividend for 62 consecutive years.

Profitability

This table compares Northwest Natural Gas and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Natural Gas -7.30% 7.75% 2.10%
Northwest Natural Gas Competitors 7.67% -12.98% 6.04%

Risk and Volatility

Northwest Natural Gas has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500. Comparatively, Northwest Natural Gas’ peers have a beta of 0.55, meaning that their average share price is 45% less volatile than the S&P 500.

Summary

Northwest Natural Gas peers beat Northwest Natural Gas on 12 of the 15 factors compared.

Northwest Natural Gas Company Profile

Northwest Natural Gas Company (NW Natural) is engaged in the distribution of natural gas. The Company’s segments include Local Gas Distribution, Gas Storage and other. The Company maintains operations in Oregon, Washington and California and conducts businesses through NW Natural and its subsidiaries. The local gas distribution business, referred to as the utility segment, serves residential, commercial, and industrial customers in Oregon and southwest Washington. The Company’s gas storage business, referred to as the gas storage segment, provides storage services for utilities, gas marketers, electric generators and industrial users from storage facilities located in Oregon and California. The Company’s other segment is referred to as non-utility and consists of non-utility investments and other business activities. The other segment consists of an equity method investment in Trail West Holdings, LLC (TWH) and other pipeline assets in NNG Financial Corporation.

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