9. Northwest Natural Holding Company (NYSE:NWN)
Dividend Yield as of September 24: 4.88%
Northwest Natural Holding Company (NYSE:NWN) ranks ninth on the dividend champions list. The natural gas distribution company offers a wide range of related services and products to its consumers. In the most recent quarter, the company continued to perform strongly and remains on track for the year. Looking ahead to 2024, its priorities include maintaining safe and reliable operations, executing the capital plan, managing regulatory dockets, and pursuing growth opportunities. The stock has surged by nearly 3% in the past 12 months.
Though Northwest Natural Holding Company (NYSE:NWN) reported an 11% YoY decline in its revenue at $212 million, the company showed progress on various other fronts. The company added nearly 16,000 gas and water utility connections over the past 12 months, resulting in a combined growth rate of 1.8% as of June 30, 2024, largely driven by strong water acquisitions. Additionally, they signed an agreement to acquire Puttman and ICH water, adding 4,200 customers and strengthening their pipeline of growth opportunities.
Palm Valley Capital Management also highlighted strengths in Northwest Natural Holding Company (NYSE:NWN) in its Q1 2024 investor letter. Here is what the firm has to say:
“During the quarter, we purchased Northwest Natural Holding Company (NYSE:NWN). Founded in 1859, NW Natural is a natural gas utility operating in Oregon and Washington. While the company targets long-term earnings growth of 4%-6%, earnings per share in 2024 are expected to decline by 7% to 15%. Earnings are being pressured by above average investments in the utility’s infrastructure and higher than expected inflation. In response, management filed for a rate increase with regulators in December 2023, which would provide the utility with a 10.1% return on equity. If approved, new rates are expected to go into effect in November and should move earnings in 2025 closer to our normalized estimate of $2.80/share. NW Natural is currently trading at 13x our normalized EPS estimate and 1.2x tangible book value—both near historical lows. The firm has increased its dividend for 68 years in a row, and the stock offers a 5.3% yield. While there remains uncertainty related to regulatory decisions and interest rates, at its current price, we believe we’re being adequately compensated for risk assumed.”
Northwest Natural Holding Company (NYSE:NWN) also holds a strong cash position. In the first six months of the year, the company generated over $246 million in operating cash flow. Its cash generation has made it possible for the company to grow its dividends by 68 consecutive years. The company offers a quarterly dividend of $0.4875 per share and has a dividend yield of 4.88%, as of September 24.
Insider Monkey’s database of Q2 2024 indicated that 11 hedge funds owned stakes in Northwest Natural Holding Company (NYSE:NWN), up from 9 in the previous quarter. These stakes are worth over $45.8 million in total.
