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National Fuel Gas' (NFG) Board Approves 2.4% Dividend Hike

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National Fuel Gas Company (NFG - Free Report) announced that the board of directors has approved a 2.4% increase in the quarterly dividend rate. The revised quarterly dividend will be 43.5 cents, payable on Jul 15, 2019 to its shareholders of record at the close of business on Jun 28.

The new annualized dividend rate of the company is $1.74 per share, resulting in a dividend yield of 3.23%. This marks the 49th straight year of increase in annual dividend rate by the board of directors, reflecting strong performance of the company. Its current dividend yield is better than the Zacks S&P 500 composite’s 1.96%.

Can We Expect Hikes in Coming Years?

National Fuel Gas, which has high-quality acreage in Marcellus and Utica shales, expects to increase annual natural gas production and gathering by an average of 15-20% through 2022. The company, after investing $584 million in fiscal 2018, plans to invest in the range of $725-$810 million in fiscal 2019. Capital expenditures will strengthen its position in these high-quality shale assets.

National Fuel Gas invested $1.5 billion since 2010 in midstream operation to expand and modernize its pipeline infrastructure for gaining access to Appalachian production. The company has the opportunity to deploy another $1.5 billion in the next four-five years in regulated businesses, while expanding and modernizing transmission, storage, and distribution assets.

Expanding operation of National Fuel Gas Company and organic growth projects generate stable cash flow and enable management to carry on with shareholder-friendly initiatives.

Long History of Dividend Payment

The 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 dividend. National Fuel Gas has been distributing dividend for 117 consecutive years. Since 1970, the company returned more than $2.9 billion to its shareholders as dividend payments.

National Fuel Gas is not the only company with a track record of more than 100 years of consistent dividend payment. Utilities like Consolidated Edison, Inc. (ED - Free Report) and UGI Corporation (UGI - Free Report) are also rewarding their shareholders with dividend payment for more than 100 years without fail.

Price Movement

Year to date, National Fuel Gas’ shares have gained 5% compared with its industry’s rally of 16.1%.

 

 

Zacks Rank & Another Key Pick

National Fuel Gas currently carries a Zacks Rank #2 (Buy). Another top-ranked stock in the same industry is ONE Gas Inc. (OGS - Free Report) , which has the same rank as National Fuel Gas. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ONE Gas delivered average positive earnings surprise of 8.29% in the last four quarters. Long-term earnings growth of the company is pegged at 5.85%. The Zacks Consensus Estimate has been upwardly revised by 0.9% to $3.46 in the past 60 days.

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