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National Fuel Gas (NFG) Board Approves 4.4% Dividend Hike
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National Fuel Gas Company (NFG - Free Report) announced that its board of directors has approved a 4.4% increase in the annual dividend rate to $1.90 per share, up from $1.82. The new quarterly dividend of 45.5 cents is payable on Jul 15, 2022 to stockholders of record at the close of the business on Jun 30, 2022.
National Fuel Gas has a long history of dividend payments and has paid out dividends for 120 consecutive years and has increased its annual dividend for 52 straight years. Since 1970, NFG has paid nearly $3.4 billion in dividends to its shareholders. The new annualized dividend reflects a dividend yield of 2.8%, better than the Zacks S&P 500 composite’s 1.7%.
Can National Fuel Gas Sustain the Dividend Hike?
National Fuel Gas has been consistently increasing total production since fiscal 2015. Systematic capital investment plans to strengthen its natural gas and oil operation are positively impacting total production and boosting earnings. The company plans to invest in the range of $725-$870 million in fiscal 2022.
Since 2010, National Fuel Gas Company has spent $2.2 billion on midstream operations to expand and modernize its pipeline infrastructure for gaining access to Appalachian production. Over the next five years, NFG plans to invest more than $500 million in the pipeline transportation and distribution system.
National Fuel Gas is also taking significant measures to replace and upgrade its existing pipelines and replaced 771 miles of utility main pipelines in the fiscal 2017-2021 period. It plans to invest in the range of $90-$100 million in fiscal 2022 for the improvement of reliability and pipeline distribution system safety.
National Fuel Gas’ acquisition of Royal Dutch Shell’s upstream and midstream assets in Pennsylvania for $500 million is immediately accretive to its earnings and production. NFG’s expanding operations enable it to generate stable cash flow and assist management in carrying on with shareholder-friendly initiatives.
Hence, systematic investments to strengthen infrastructure to efficiently serve more customers and contributions from acquired Shell’s assets will provide enough funds to sustain the dividend hike over the long term.
Utilities’ Legacy of Dividend Payout
Companies that are involved in utility services generally have stable operations and earnings. Consistent performance and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
Utilities like Atmos Energy Corporation (ATO - Free Report) , MDU Resources Group Inc. (MDU - Free Report) and Spire Inc. (SR - Free Report) , among others, have been rewarding shareholders with dividend hikes.
Atmos Energy has raised the annual dividend for 38 consecutive years. Atmos Energy approved an 8.8% increase in the annual dividend to $2.72 per share. ATO has a current dividend yield of 2.6%, better than the Zacks S&P 500 composite’s yield of 1.7%. The long-term (three to five years) earnings growth of Atmos Energy is 7.3%.
MDU Resources has raised the annual dividend for 31 consecutive years. MDU Resources approved a 1.2% increase in the annual dividend to 87 cents per share. MDU has a current dividend yield of 3.4%. The long-term earnings growth of MDU Resources is 6.9%.
Spire has raised the annual dividend for 19 consecutive years. Spire approved a 5.4% increase in the annual dividend to $2.74 per share. SR has a current dividend yield of 3.8%. The long-term earnings growth of Spire is 5%.
Image: Bigstock
National Fuel Gas (NFG) Board Approves 4.4% Dividend Hike
National Fuel Gas Company (NFG - Free Report) announced that its board of directors has approved a 4.4% increase in the annual dividend rate to $1.90 per share, up from $1.82. The new quarterly dividend of 45.5 cents is payable on Jul 15, 2022 to stockholders of record at the close of the business on Jun 30, 2022.
National Fuel Gas has a long history of dividend payments and has paid out dividends for 120 consecutive years and has increased its annual dividend for 52 straight years. Since 1970, NFG has paid nearly $3.4 billion in dividends to its shareholders. The new annualized dividend reflects a dividend yield of 2.8%, better than the Zacks S&P 500 composite’s 1.7%.
Can National Fuel Gas Sustain the Dividend Hike?
National Fuel Gas has been consistently increasing total production since fiscal 2015. Systematic capital investment plans to strengthen its natural gas and oil operation are positively impacting total production and boosting earnings. The company plans to invest in the range of $725-$870 million in fiscal 2022.
Since 2010, National Fuel Gas Company has spent $2.2 billion on midstream operations to expand and modernize its pipeline infrastructure for gaining access to Appalachian production. Over the next five years, NFG plans to invest more than $500 million in the pipeline transportation and distribution system.
National Fuel Gas is also taking significant measures to replace and upgrade its existing pipelines and replaced 771 miles of utility main pipelines in the fiscal 2017-2021 period. It plans to invest in the range of $90-$100 million in fiscal 2022 for the improvement of reliability and pipeline distribution system safety.
National Fuel Gas’ acquisition of Royal Dutch Shell’s upstream and midstream assets in Pennsylvania for $500 million is immediately accretive to its earnings and production. NFG’s expanding operations enable it to generate stable cash flow and assist management in carrying on with shareholder-friendly initiatives.
Hence, systematic investments to strengthen infrastructure to efficiently serve more customers and contributions from acquired Shell’s assets will provide enough funds to sustain the dividend hike over the long term.
Utilities’ Legacy of Dividend Payout
Companies that are involved in utility services generally have stable operations and earnings. Consistent performance and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
Utilities like Atmos Energy Corporation (ATO - Free Report) , MDU Resources Group Inc. (MDU - Free Report) and Spire Inc. (SR - Free Report) , among others, have been rewarding shareholders with dividend hikes.
Atmos Energy has raised the annual dividend for 38 consecutive years. Atmos Energy approved an 8.8% increase in the annual dividend to $2.72 per share. ATO has a current dividend yield of 2.6%, better than the Zacks S&P 500 composite’s yield of 1.7%. The long-term (three to five years) earnings growth of Atmos Energy is 7.3%.
MDU Resources has raised the annual dividend for 31 consecutive years. MDU Resources approved a 1.2% increase in the annual dividend to 87 cents per share. MDU has a current dividend yield of 3.4%. The long-term earnings growth of MDU Resources is 6.9%.
Spire has raised the annual dividend for 19 consecutive years. Spire approved a 5.4% increase in the annual dividend to $2.74 per share. SR has a current dividend yield of 3.8%. The long-term earnings growth of Spire is 5%.
Zacks Rank & Price Performance
Currently, National Fuel Gas carries a Zacks Rank #3 (Hold). In the past six months, shares of NFG have rallied 7.9% compared with the industry’s 7.3% growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research