NORTHWEST NATURAL HOLDING CO (NWN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NWN - US66765N1054 - Common Stock
46.39 USD
-0.15 (-0.32%)
Taking everything into account, NWN scores 4 out of 10 in our fundamental rating. NWN was compared to 14 industry peers in the Gas Utilities industry. There are concerns on the financial health of NWN while its profitability can be described as average. NWN is not valued too expensively and it also shows a decent growth rate. NWN also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- NWN had positive earnings in the past year.
- In the past year NWN had a positive cash flow from operations.
- In the past 5 years NWN has always been profitable.
- In the past 5 years NWN always reported a positive cash flow from operatings.
1.2 Ratios
- With a Return On Assets value of 1.72%, NWN is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
- With a Return On Equity value of 7.01%, NWN is not doing good in the industry: 78.57% of the companies in the same industry are doing better.
- With a Return On Invested Capital value of 3.50%, NWN is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
- NWN had an Average Return On Invested Capital over the past 3 years of 3.03%. This is below the industry average of 6.27%.
- The last Return On Invested Capital (3.50%) for NWN is above the 3 year average (3.03%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.72% | ||
| ROE | 7.01% | ||
| ROIC | 3.5% |
ROA(3y)1.75%
ROA(5y)1.85%
ROE(3y)6.78%
ROE(5y)7.48%
ROIC(3y)3.03%
ROIC(5y)3.09%
1.3 Margins
- Looking at the Profit Margin, with a value of 7.94%, NWN is doing worse than 71.43% of the companies in the same industry.
- NWN's Profit Margin has declined in the last couple of years.
- With a Operating Margin value of 20.07%, NWN perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
- NWN's Operating Margin has been stable in the last couple of years.
- The Gross Margin of NWN (64.40%) is better than 64.29% of its industry peers.
- In the last couple of years the Gross Margin of NWN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.07% | ||
| PM (TTM) | 7.94% | ||
| GM | 64.4% |
OM growth 3Y-4.37%
OM growth 5Y-0.3%
PM growth 3Y-9.23%
PM growth 5Y-3.72%
GM growth 3Y-1.06%
GM growth 5Y0.22%
2. Health
2.1 Basic Checks
- NWN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for NWN has been increased compared to 1 year ago.
- Compared to 5 years ago, NWN has more shares outstanding
- NWN has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 0.65, we must say that NWN is in the distress zone and has some risk of bankruptcy.
- NWN has a Altman-Z score of 0.65. This is in the lower half of the industry: NWN underperforms 71.43% of its industry peers.
- A Debt/Equity ratio of 1.62 is on the high side and indicates that NWN has dependencies on debt financing.
- NWN has a Debt to Equity ratio of 1.62. This is in the lower half of the industry: NWN underperforms 78.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.62 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.65 |
ROIC/WACC0.58
WACC6.04%
2.3 Liquidity
- A Current Ratio of 0.59 indicates that NWN may have some problems paying its short term obligations.
- With a Current ratio value of 0.59, NWN perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
- A Quick Ratio of 0.43 indicates that NWN may have some problems paying its short term obligations.
- NWN has a Quick ratio (0.43) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.59 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
- NWN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.38%, which is quite impressive.
- NWN shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.09% yearly.
- The Revenue has grown by 11.27% in the past year. This is quite good.
- Measured over the past years, NWN shows a quite strong growth in Revenue. The Revenue has been growing by 9.09% on average per year.
EPS 1Y (TTM)35.38%
EPS 3Y-3.23%
EPS 5Y-0.09%
EPS Q2Q%-2.82%
Revenue 1Y (TTM)11.27%
Revenue growth 3Y10.25%
Revenue growth 5Y9.09%
Sales Q2Q%20.3%
3.2 Future
- Based on estimates for the next years, NWN will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.04% on average per year.
- Based on estimates for the next years, NWN will show a small growth in Revenue. The Revenue will grow by 6.47% on average per year.
EPS Next Y26.54%
EPS Next 2Y14.38%
EPS Next 3Y12.26%
EPS Next 5Y9.04%
Revenue Next Year10.85%
Revenue Next 2Y8.68%
Revenue Next 3Y7.13%
Revenue Next 5Y6.47%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 16.16 indicates a correct valuation of NWN.
- Compared to the rest of the industry, the Price/Earnings ratio of NWN indicates a somewhat cheap valuation: NWN is cheaper than 64.29% of the companies listed in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.25. NWN is valued slightly cheaper when compared to this.
- With a Price/Forward Earnings ratio of 15.28, NWN is valued correctly.
- 71.43% of the companies in the same industry are more expensive than NWN, based on the Price/Forward Earnings ratio.
- NWN is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.16 | ||
| Fwd PE | 15.28 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NWN indicates a somewhat cheap valuation: NWN is cheaper than 64.29% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 9.48 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- A more expensive valuation may be justified as NWN's earnings are expected to grow with 12.26% in the coming years.
PEG (NY)0.61
PEG (5Y)N/A
EPS Next 2Y14.38%
EPS Next 3Y12.26%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.21%, NWN is a good candidate for dividend investing.
- NWN's Dividend Yield is a higher than the industry average which is at 3.96.
- Compared to an average S&P500 Dividend Yield of 1.82, NWN pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
5.2 History
- The dividend of NWN has a limited annual growth rate of 0.84%.
- NWN has been paying a dividend for at least 10 years, so it has a reliable track record.
- NWN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.84%
Div Incr Years24
Div Non Decr Years24
5.3 Sustainability
- 76.25% of the earnings are spent on dividend by NWN. This is not a sustainable payout ratio.
- NWN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP76.25%
EPS Next 2Y14.38%
EPS Next 3Y12.26%
NORTHWEST NATURAL HOLDING CO / NWN FAQ
What is the fundamental rating for NWN stock?
ChartMill assigns a fundamental rating of 4 / 10 to NWN.
What is the valuation status of NORTHWEST NATURAL HOLDING CO (NWN) stock?
ChartMill assigns a valuation rating of 5 / 10 to NORTHWEST NATURAL HOLDING CO (NWN). This can be considered as Fairly Valued.
What is the profitability of NWN stock?
NORTHWEST NATURAL HOLDING CO (NWN) has a profitability rating of 4 / 10.
What is the valuation of NORTHWEST NATURAL HOLDING CO based on its PE and PB ratios?
The Price/Earnings (PE) ratio for NORTHWEST NATURAL HOLDING CO (NWN) is 16.16 and the Price/Book (PB) ratio is 1.34.
Is the dividend of NORTHWEST NATURAL HOLDING CO sustainable?
The dividend rating of NORTHWEST NATURAL HOLDING CO (NWN) is 8 / 10 and the dividend payout ratio is 76.25%.