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4 Reasons to Add National Fuel Gas (NFG) to Your Portfolio

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Earnings estimates for National Fuel Gas Company (NFG - Free Report) have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for fiscal 2018 and 2019 earnings has moved up 3.3% and 7.8% to $3.40 and $3.30 per share, respectively.

National Fuel Gas Company, a Zacks Rank #2 (Buy) stock, is an integrated energy company, which has natural gas assets located in the prolific Appalachian basin and oil-producing assets in California.

Let’s focus on the factors that make National Fuel Gas an attractive stock to hold on to for obtaining greater returns.

Systematic Spending Boosts Production: The company’s systematic capital spending to strengthen its natural gas and oil operation is positively impacting total production. It has been consistently increasing its total production since fiscal 2015. After spending $455 million in fiscal 2017, the company plans to invest in the range of $585-$645 million in fiscal 2018 and $745-$845 million in fiscal 2019.

The company has high-quality acreage in Marcellus and Utica Shales, and expects to increase its annual natural gas production by an average 15-20% over the next few years.

VGM Score: The stock has a favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all the three factors. Back-tested results show that stocks with an impressive VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.

Improving Top Line & Surprise History: Its fiscal 2018 revenue estimates improved 2.37% year over year to $1.62 billion, while the Zacks Consensus Estimate has moved up 3.03% from the prior-year quarter to $3.40 per share.

The company is a consistent performer and beat estimates in each of the last four quarters, resulting in an average positive surprise of 7.28%.

Dividend Payment: The consistent performance of the company enables it to pay regular dividend and reward its shareholders. The company has been paying dividend for the past 116 years and consecutively raising dividend rate since the past 48 years. It has paid nearly $2.9 billion in dividend since 1970. Its current dividend yield is 3.04%, better than the industry’s 2.77% and Zacks S&P 500 Composite group’s 1.76%.

Other Stocks to Consider

Other top-ranked stocks from the industry include New Jersey Resources Corporation (NJR - Free Report) , Southwest Gas Holdings, Inc. (SWX - Free Report) and UGI Corporation (UGI - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for fiscal 2018 EPS for New Jersey Resources and UGI Corporation has moved up 1.1% and 1.5%, respectively, in the past 60 days. Also, the Zacks Consensus Estimate for 2018 EPS for Southwest Gas Holdings has been revised upward by 3.63% in the same time frame.

All the stocks have surpassed the broader industry’s growth over the past six months.



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