Northwest Natural Holding (NWN) Raises Its Dividend, Is The Stock Still A Bargain?

Northwest Natural Holding (NWN) just raised its quarterly dividend to $0.50 per share, lifting the indicated annual payout to $2.00 and extending a 71 year streak of increases, the largest bump since 2012.

At a share price of $47.73, Northwest Natural Holding has seen its 90 day share price return fall 6.85%, while the 1 year total shareholder return, which includes dividends, is 11.41%. This points to fading short term momentum alongside stronger long term income driven gains.

Scan dividend-focused utilities moving on fresh payout news, such as Northwest Natural Holding, by zeroing in on our hand picked 8 dividend fortresses.

Income reliability has just been rewarded with a bigger cheque, while the share price has cooled over the past quarter. Does that mix still skew the risk and reward toward fresh buyers, once you run the valuation math?

Most Popular Narrative: 17% Undervalued

Analysts following Northwest Natural Holding place fair value near $57.40 per share, comfortably above the recent $47.73 close. This puts the fresh dividend hike into a broader total return frame.

Progress on the fully contracted MX3 gas storage expansion, a roughly US$300 million project with 4 to 5 Bcf of incremental capacity, 25 year contracts and a fixed 12.5% allowed ROE, is expected to adjust Northwest Natural Holding’s EPS growth framework upward once notice to proceed is secured and the project enters service.

See why 7 investors see Northwest Natural Holding as 17% undervalued.

Result: Fair Value of $57.40 (UNDERVALUED)

Still, the story of Northwest Natural Holding can change quickly if electrification and decarbonization policies curb gas demand, or if higher costs and equity issuance compress EPS.

Find out about the key risks to this Northwest Natural Holding narrative.

Another View: SWS DCF Puts A Lower Tag On Northwest Natural Holding

The analyst target pins fair value for Northwest Natural Holding at $57.40, yet the Simply Wall St DCF model points to a future cash flow value of $39.46. That gap frames the stock as overvalued on cash flows even as the P/E story hints at upside. Which lens do you trust more for long term returns?

To see how that cash flow view is built line by line, take a closer look at the SWS DCF model for Northwest Natural Holding, including the key assumptions behind the $39.46 figure Look into how the SWS DCF model arrives at its fair value..

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Northwest Natural Holding for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 28 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals on Northwest Natural Holding so far. If you want to move quickly and build your own stance, consider both perspectives using the 4 key rewards and 2 important warning signs.

Looking for more ideas beyond Northwest Natural Holding?

If Northwest Natural Holding has your attention, do not stop here. Broaden your watchlist with other focused ideas that might fit your portfolio goals.

• Target potential mispricings by scanning companies that combine quality business profiles with attractive entry points through the Simply Wall St screener for 28 high quality undervalued stocks.
• Strengthen your income stream by reviewing companies that feature higher yields and consistent payouts using our curated list of 8 dividend fortresses.
• Reduce portfolio stress by focusing on sturdier balance sheets and healthier fundamentals through the dedicated list of solid balance sheet and fundamentals (25 results).

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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