We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
OGS vs. NWN: Which Gas Utility Offers Better Growth Potential?
Read MoreHide Full Article
Key Takeaways
ONE Gas and Northwest Natural benefit from rising gas demand, customer growth and infrastructure spending.
OGS has 48.95% debt to capital versus NWN's 62.29%, while NWN offers a higher dividend yield.
OGS projects faster EPS growth and $4.3B in five-year spending; NWN plans $2.6-$2.9B through 2030.
The companies operating in the Zacks Utility - Gas Distribution industry deliver natural gas from producing regions through interstate pipelines and regulated distribution networks to residential, commercial and industrial end-users. Companies earn regulated delivery revenues and approved returns on infrastructure investments. An expanding rate base, modernizing pipelines, an increasing customer base and improved system reliability drive predictable earnings, dividends and long-term shareholder value.
Natural gas demand in the United States is increasing, driven by its wide availability and clean-burning nature. Rising clean electricity demand from AI-driven data centers, residential demand and the reshoring of a few industries are creating fresh demand for clean electricity, a major portion of which is generated from natural gas. This trend supports higher pipeline utilization, infrastructure investments and long-term earnings growth for regulated gas distribution utilities.
Amid the increasing demand for natural gas distribution, let us take a closer look at ONE Gas, Inc. (OGS - Free Report) and Northwest Natural Holding Company (NWN - Free Report) . These regulated utilities are capitalizing on rising natural gas demand, customer expansion and disciplined infrastructure investments, making them comparable players in the utility industry.
ONE Gas benefits from rising natural gas demand, particularly from residential customers, an expanding customer base and favorable rate adjustments, supporting stable earnings and predictable cash flow. The company's disciplined capital investments in infrastructure strengthen service reliability, increase operational efficiency and drive long-term financial growth.
Northwest Natural benefits from rising natural gas demand, an expanding customer base and constructive regulatory outcomes, supporting stable revenue growth and long-term financial performance. The company is undertaking systematic capital investments to expand natural gas storage, modernize infrastructure, enhance system reliability and support long-term earnings growth.
ONE Gas and Northwest Natural are prominent regulated utilities. A comparison of their fundamentals can help identify the more attractive investment choice.
OGS & NWN’s Earnings Growth Projections
The Zacks Consensus Estimate for OGS’ earnings per share (EPS) is pegged at $4.72 in 2026 and $5.01 in 2027, suggesting year-over-year growth of 5.36% and 6.14%, respectively.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NWN’s EPS is pegged at $3.05 in 2026 and $3.22 in 2027, suggesting year-over-year growth of 4.10% and 5.74%, respectively.
Image Source: Zacks Investment Research
Debt to Capital
Utilities in the Zacks sector require substantial capital investments to modernize infrastructure and support growing customer demand. By combining internally generated cash flows with debt and equity financing, these companies fund long-term projects that expand their rate base, strengthen earnings and create shareholder value.
ONE Gas’ debt-to-capital currently stands at 48.95% compared with Northwest Natural’s 62.29%. Both companies are using debt to fund their business. NWN's debt level surpasses both OGS’ and the industry average of 54.47%, highlighting its greater reliance on debt financing.
OGS & NWN’s Dividend Yield
Dividends are regular cash payments that utility companies distribute to shareholders as a share of their earnings. They provide investors with a steady income stream while reflecting the company's financial strength and commitment to creating long-term shareholder value.
Currently, Northwest Natural's dividend yield is 3.97%, while ONE Gas’ is 3.45%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.36%.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (ROE) indicates how efficiently a company uses shareholders' equity to generate earnings. A strong ROE demonstrates effective capital management and long-term shareholder value creation.
Northwest Natural’s current ROE is 8.46%, outperforming ONE Gas, which reports a tad lower ROE of 8.45%. NWN utilizes shareholder capital more efficiently and generates slightly higher profits, though both companies’ returns remain below the industry average of 10.13%.
Capital Investment Plans
Utility operations are capital-intensive, requiring substantial investments to develop infrastructure, maintain existing assets and enhance system reliability. Natural gas utilities continuously invest in pipelines, storage facilities and distribution networks to ensure safe, reliable service and support future growth.
ONE Gas plans to invest approximately $800 million in 2026 and nearly $4.3 billion over the next five years to replace aging pipelines, expand its regulated rate base, strengthen infrastructure, enhance system reliability and support long-term earnings growth. Northwest Natural expects to invest $500-$550 million in 2026 and $2.6-$2.9 billion through 2030, supporting rate base growth, infrastructure modernization, operational efficiency and reliable service for an expanding customer base.
Price Performance
ONE Gas shares have gained 3.6% in the past month compared with Northwest Natural’s growth of 0.7%.
Image Source: Zacks Investment Research
Overall Assessment
ONE Gas and Northwest Natural are benefiting from increasing natural gas demand, steady customer growth and disciplined infrastructure investments to deliver safe, reliable service across their regulated service territories.
ONE Gas stands out with stronger earnings estimate revisions, a broader capital expenditure plan, a healthier debt profile and better share price performance, making it an attractive utility investment.
View the Zacks #1 Rank List
Image: Bigstock
OGS vs. NWN: Which Gas Utility Offers Better Growth Potential?
Key Takeaways
The companies operating in the Zacks Utility - Gas Distribution industry deliver natural gas from producing regions through interstate pipelines and regulated distribution networks to residential, commercial and industrial end-users. Companies earn regulated delivery revenues and approved returns on infrastructure investments. An expanding rate base, modernizing pipelines, an increasing customer base and improved system reliability drive predictable earnings, dividends and long-term shareholder value.
Natural gas demand in the United States is increasing, driven by its wide availability and clean-burning nature. Rising clean electricity demand from AI-driven data centers, residential demand and the reshoring of a few industries are creating fresh demand for clean electricity, a major portion of which is generated from natural gas. This trend supports higher pipeline utilization, infrastructure investments and long-term earnings growth for regulated gas distribution utilities.
Amid the increasing demand for natural gas distribution, let us take a closer look at ONE Gas, Inc. (OGS - Free Report) and Northwest Natural Holding Company (NWN - Free Report) . These regulated utilities are capitalizing on rising natural gas demand, customer expansion and disciplined infrastructure investments, making them comparable players in the utility industry.
ONE Gas benefits from rising natural gas demand, particularly from residential customers, an expanding customer base and favorable rate adjustments, supporting stable earnings and predictable cash flow. The company's disciplined capital investments in infrastructure strengthen service reliability, increase operational efficiency and drive long-term financial growth.
Northwest Natural benefits from rising natural gas demand, an expanding customer base and constructive regulatory outcomes, supporting stable revenue growth and long-term financial performance. The company is undertaking systematic capital investments to expand natural gas storage, modernize infrastructure, enhance system reliability and support long-term earnings growth.
ONE Gas and Northwest Natural are prominent regulated utilities. A comparison of their fundamentals can help identify the more attractive investment choice.
OGS & NWN’s Earnings Growth Projections
The Zacks Consensus Estimate for OGS’ earnings per share (EPS) is pegged at $4.72 in 2026 and $5.01 in 2027, suggesting year-over-year growth of 5.36% and 6.14%, respectively.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NWN’s EPS is pegged at $3.05 in 2026 and $3.22 in 2027, suggesting year-over-year growth of 4.10% and 5.74%, respectively.
Image Source: Zacks Investment Research
Debt to Capital
Utilities in the Zacks sector require substantial capital investments to modernize infrastructure and support growing customer demand. By combining internally generated cash flows with debt and equity financing, these companies fund long-term projects that expand their rate base, strengthen earnings and create shareholder value.
ONE Gas’ debt-to-capital currently stands at 48.95% compared with Northwest Natural’s 62.29%. Both companies are using debt to fund their business. NWN's debt level surpasses both OGS’ and the industry average of 54.47%, highlighting its greater reliance on debt financing.
OGS & NWN’s Dividend Yield
Dividends are regular cash payments that utility companies distribute to shareholders as a share of their earnings. They provide investors with a steady income stream while reflecting the company's financial strength and commitment to creating long-term shareholder value.
Currently, Northwest Natural's dividend yield is 3.97%, while ONE Gas’ is 3.45%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.36%.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (ROE) indicates how efficiently a company uses shareholders' equity to generate earnings. A strong ROE demonstrates effective capital management and long-term shareholder value creation.
Northwest Natural’s current ROE is 8.46%, outperforming ONE Gas, which reports a tad lower ROE of 8.45%. NWN utilizes shareholder capital more efficiently and generates slightly higher profits, though both companies’ returns remain below the industry average of 10.13%.
Capital Investment Plans
Utility operations are capital-intensive, requiring substantial investments to develop infrastructure, maintain existing assets and enhance system reliability. Natural gas utilities continuously invest in pipelines, storage facilities and distribution networks to ensure safe, reliable service and support future growth.
ONE Gas plans to invest approximately $800 million in 2026 and nearly $4.3 billion over the next five years to replace aging pipelines, expand its regulated rate base, strengthen infrastructure, enhance system reliability and support long-term earnings growth. Northwest Natural expects to invest $500-$550 million in 2026 and $2.6-$2.9 billion through 2030, supporting rate base growth, infrastructure modernization, operational efficiency and reliable service for an expanding customer base.
Price Performance
ONE Gas shares have gained 3.6% in the past month compared with Northwest Natural’s growth of 0.7%.
Image Source: Zacks Investment Research
Overall Assessment
ONE Gas and Northwest Natural are benefiting from increasing natural gas demand, steady customer growth and disciplined infrastructure investments to deliver safe, reliable service across their regulated service territories.
ONE Gas stands out with stronger earnings estimate revisions, a broader capital expenditure plan, a healthier debt profile and better share price performance, making it an attractive utility investment.
Considering the factors discussed above, ONE Gas emerges as the stronger investment opportunity, while both companies currently maintain a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.