Last Updated: 18 Sep 2024
Executive Summary
National Fuel Gas Company (NFG) is a diversified energy company with a market capitalization of $5.56 billion. The company has a strong financial position with an EBITDA of $1.2 billion and a net income of $449 million for the latest quarter. NFG's trailing P/E ratio of 17.63 is in line with the industry average, while its forward P/E ratio of 10.14 is attractive. The company's dividend yield of 0.0339% is below the industry average, but NFG has a history of increasing its dividend over the past five years.
Company Overview
National Fuel Gas Company is a diversified energy company that operates in the natural gas distribution, pipeline transportation, and energy marketing businesses. The company serves approximately 7.5 million customers in New York, Pennsylvania, Ohio, and West Virginia. NFG's natural gas distribution business is its largest segment, accounting for approximately 60% of the company's revenue. The company's pipeline transportation business transports natural gas from the Appalachian Basin to markets in the Northeast and Midwest. NFG's energy marketing business sells natural gas and electricity to industrial, commercial, and residential customers.
Fundamental Analysis
NFG's financial performance has been strong in recent years. The company's revenue has grown at a compound annual growth rate (CAGR) of 3.5% over the past five years. NFG's net income has also grown at a CAGR of 4.2% over the same period. The company's EBITDA margin has remained stable at around 22% over the past five years. NFG's balance sheet is also strong. The company has a low level of debt and a strong cash position. NFG's return on equity (ROE) has been consistently above 10% over the past five years.
Technical Analysis
NFG's stock price has been in a downtrend since reaching a high of $61.42 in July 2022. The stock price is currently trading below its 50-day and 200-day moving averages. The relative strength index (RSI) is also below 50, indicating that the stock is oversold.
Short Term Outlook
NFG's stock price is likely to remain under pressure in the short term. The company's earnings are expected to decline in the next quarter due to the impact of higher natural gas prices. The stock price is also likely to be impacted by the overall market sentiment, which has been negative in recent months.
Long Term Outlook
NFG's long-term outlook is positive. The company is well-positioned to benefit from the growing demand for natural gas. NFG's strong financial position and experienced management team should also help the company to navigate the challenges of the energy industry.
Analyst Recommendations
The majority of analysts have a buy rating on NFG's stock. The average analyst target price is $72.5, which represents a potential upside of 19.3% from the current price.
