Northwest Natural Gas Company Offers Investors 62 Consecutive Years of Annual Dividend Hikes (NWN)
By: Ned Piplovic,
The Northwest Natural Gas Company (NYSE:NWN) started paying dividends to its shareholders in 1952 and began its current stream of consecutive annual dividend hikes just a few years later. The company accompanies its stellar record of rising dividend payouts with a 3.2% yield.
The company’s share price encountered some headwinds and fluctuated over the past year. However, the long-term outlook is positive, and the share price should continue to provide complimentary growth to the rising dividends for moderate but steady total returns in the long run.
While this stock might not generate above-average returns, it could be an excellent choice to provide steady dividend income and basic asset appreciation to any investment portfolio. Therefore, any investors interested in this stock should do their own research and act prior to the company’s next ex-dividend date — set for April 27, 2018 — and ensure eligibility to receive the dividend distribution in the next round scheduled on the May 15. 2018, pay date.
Northwest Natural Gas Company (NYSE:NWN)
Headquartered in Portland, Oregon, and founded in 1859, the Northwest Natural Gas Company is a regional gas utility that provides storage and distribution of natural gas in Washington state, Oregon and California. The company operates in two segments, Local Gas Distribution and Gas Storage. The Local Gas Distribution segment purchases, sells and delivers natural gas and related services to more than 700,000 residential, commercial and industrial customers in Oregon and southwest Washington. This segment also builds and maintains pipeline distribution systems, sources natural gas from producers and arranges transportation of gas to customers. The Gas Storage segment further delivers underground storage services and holds leases and other property interests in approximately 17,000 net acres of underground natural gas storage in Oregon and California.
The company’s share price battled moderate volatility through the entire trailing 12-month (TTM) period. However, through the volatility, the share price managed to gain more than 15% over the first 11 months of the TTM before giving back all those gains during the most recent overall market decline. The share price gained nearly 15% just in five months and peaked at more than $68 at that time. After a brief 9.5% pullback, the share price regained those loses by November 29, 2017, and hit a 52-week high of $69.15 the following day. However, immediately after the peak, the share price started its 25% decline towards its 52-week low of $51.95 on March 2, 2018. After bottoming out at the beginning of March, the share price reverted to its rising trend and has recovered 40% of those losses to close on April 5, 2018, at $58.90. This closing price was 13% below the November price peak, virtually identical to the price from one year earlier, 15% higher than the 52-week low from early March 2018 and 33% higher than it was five years prior.
The company’s current $0.4725 quarterly dividend distribution is 0.5% higher than the $0.47 payout from the same period last year. This new quarterly amount converts to a $1.89 annual payout and currently yields 3.2%. The company has boosted its annual dividend for the past 62 consecutive years. Over the past two decades, the company grew its dividend at sustainable levels and managed to maintain an average rate of 2.2% per year. The current $1.89 annualized payout is 55% higher than the $1.22 dividend distributed in 1998.
Utility companies are not known for high dividend yields. Therefore, even Northwest Natural Gas Company’s relatively low 3.2% yield is still 25% higher than the simple average yield of all the companies in the entire Utilities sector.
While the recent share price drop nullified most of the asset appreciation over the last 12 months, the company still managed to deliver a total return of 3.4% for the 12 months. However, this equity is a better fit for long horizon outlook. Over the past three years, the company provided a 33% total return, and it had a 55.2% total return over the past five years.
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