National Fuel Gas Co (NYSE:NFG): A Prime Candidate for Growth at a Reasonable Price

The search for growth stocks trading at reasonable prices remains a foundation of many long-term investment strategies. This method, often called Growth at a Reasonable Price or affordable growth, tries to find companies with solid expansion potential that are not yet completely represented in their stock price. By concentrating on businesses showing good growth, acceptable profitability, and stable financial condition, all while trading at a fair price, investors aim to take part in a company's upward move while reducing the risk linked with paying too much for future potential. One company found through this process is National Fuel Gas Co (NYSE:NFG).

Growth Path

A main part of the affordable growth method is finding companies with a clear and maintainable growth direction. National Fuel Gas Co shows a strong growth picture, receiving a high ChartMill Growth Rating of 8 out of 10. The company's recent financial results support this strength, with both revenue and earnings per share (EPS) showing major increases. This solid past performance is supported by good expectations for the future, indicating the growth story is still in place.

• Earnings Per Share (EPS): Increased by a notable 37.92% over the last year, with a 5-year average yearly growth rate of 18.56%.
• Revenue: Grew by 110.24% in the past year, with a stable historical average yearly growth of 8.05%.
• Future Outlook: Analysts predict continued growth, with expected yearly EPS growth of 10.81% and revenue growth of 15.80% in the next years.

This mix of good historical results and a positive future view is important for an affordable growth candidate, as it gives assurance that the company's expansion is not a short-term event.

Appealing Price

For a stock to be seen as "affordable," its price measurements must not be high, even with strong growth. This is where National Fuel Gas Co is notable, getting a high ChartMill Valuation Rating of 8. The company's shares seem fairly priced across several important price measures, particularly when measured against both the wider market and its industry counterparts. This makes a possible chance for investors to purchase a growing business without paying a high multiple.

• Price-to-Earnings (P/E) Ratio: At 11.49, it is much lower than the S&P 500 average of 26.28 and is less expensive than 78.57% of its industry counterparts.
• Forward P/E Ratio: An even more appealing 9.73, showing a low price relative to future earnings predictions.
• Enterprise Value/EBITDA: Priced lower than 92.86% of the companies in its industry based on this measure.

These price numbers are important to the method because they indicate the market may be pricing the company's growth potential too low, offering a good entry point.

Profitability and Financial Condition

While growth and price are the main standards, maintainable affordable growth also relies on a company's capability to produce profits and keep a steady financial base. National Fuel Gas Co shows strong operational effectiveness, receiving a high ChartMill Profitability Rating of 8. The company's returns on assets and equity are some of the top in its industry, showing good use of capital. However, the review also shows points for thought about its financial condition, which gets a medium rating of 5. While the company creates value with a return on invested capital that is higher than its cost of capital, its liquidity measures are a point of focus.

• Profitability Points:
  • Return on Equity of 30.04%, doing better than all industry counterparts.
  • Operating Margin of 42.33%, one of the top in the industry.
• Condition Points:
  • A low Current Ratio of 0.44 shows possible difficulties in meeting short-term responsibilities.
  • Even with this, its Debt-to-Equity ratio is better than most competitors, and its Altman-Z score, while in a middle area, is the top in its industry.

These factors are key to the screening process; strong profitability pays for future growth, while a full review of financial condition helps find possible risks that could interrupt that growth.

Summary

National Fuel Gas Co presents a strong case for investors using an affordable growth method. The company's notable mix of good historical and predicted growth, combined with what seems to be a very fair price, matches directly with the main ideas of seeking Growth at a Reasonable Price. Its excellent profitability further supports the investment case, though investors should keep aware of the details within its financial condition measurements. The fundamental review indicates that NFG is a company growing solidly while still seeming undervalued, making it a notable candidate for more study.

For investors interested in finding other companies that match this description, you can use the Affordable Growth stock screener to find more results based on similar standards. A detailed fundamental analysis report for NFG is also ready for a more detailed look into its financial measurements.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The content is based on data believed to be reliable, but its accuracy cannot be guaranteed. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.