With the S&P 500 and Nasdaq still near record highs now may be a good time to scope out utility stocks which can serve as defensive investments in case of an eventual correction. Seeing as their services have consistent and stable demand, it's noteworthy that three utility stocks were added to the Zacks Rank #1 (Strong Buy) list over the last week. We'll start with National Fuel Gas Company, an integrated energy company with natural gas assets in the prolific Appalachian basin along with oil-producing asset ...

Core Viewpoint - National Fuel Gas (NFG) is benefiting from its high-quality Appalachian assets and rising earnings estimates, with expanding upstream and midstream operations serving as additional tailwinds [1] Growth Projections - The Zacks Consensus Estimate for fiscal 2024 and 2025 sales indicates year-over-year growth of 3% and 15% respectively [7] - The Zacks Consensus Estimate for fiscal 2024 and 2025 earnings per share has increased by 2.2% and 1.2% respectively in the past 60 days [13] Return on Equity & Dividend Yield - National Fuel Gas has a return on equity (ROE) of 15.06%, which is higher than the industry average of 9.01% [14] - The company has a dividend yield of 3.54%, significantly above the Zacks S&P 500 composite's average of 1.6% [8] - National Fuel Gas has been paying dividends for the past 122 years and has raised the dividend rate consecutively for the past 54 years [15] Share Repurchase - The company has been actively investing in its operations, with a planned capital expenditure of $885-$980 million for fiscal 2024, which includes $525-$555 million for exploration and production [4] Debt to Capital - National Fuel Gas has a current debt to capital ratio of 41.94%, which is lower than the industry average of 43.83%, indicating a more favorable position in a high interest rate environment [3] Price Performance - Over the past 12 months, National Fuel Gas' shares have returned 7.6%, contrasting with a 1.3% decline in the industry [11]

Company Background and Recent Earnings Results - National Fuel Gas operates in upstream, midstream, and downstream sectors, with upstream being the most significant. The company has over 1 million acres in the Marcellus and Utica shales and serves over 750,000 utility customers in western New York and northwestern Pennsylvania [2][6] - For Q2 of fiscal year 2024, National Fuel Gas reported a revenue decline of 12.2% to $630 million, marking the fourth consecutive quarter of year-over-year declines. However, adjusted earnings-per-share increased to $1.79 from $1.54, exceeding expectations by $0.33 [2][4] - The company revised its 2024 guidance, expecting average gas prices to drop to $2.00 from $2.40, leading to a new adjusted earnings-per-share range of $4.75 to $5.05, down from $4.90 to $5.20 [2] Natural Gas Price Correlation - National Fuel Gas' performance is closely tied to natural gas prices, which are subject to volatility. The company forecasts average natural gas prices to be $2.00 per MMBtu for the remainder of the fiscal year [3][14] Dividend and Valuation Analysis - National Fuel Gas has a long history of paying dividends, with a growth streak of over 120 years. The current dividend growth rate is 2.5% over the last decade, with a recent 4% increase in the quarterly dividend [9][15] - The stock currently yields 3.7% based on a forward annualized dividend of $2.06, with a projected payout ratio of 42% [9] - The shares closed at $55, implying a forward price-to-earnings ratio of 11.2, which is slightly overvalued compared to the energy sector's median ratios. However, on a historical basis, the stock appears undervalued [9] Business Segment Performance - The Gathering segment saw an 18% earnings growth and a 12% revenue increase, while the Pipeline & Storage segment reported a 22% earnings gain and a 14% revenue increase. The Utility segment experienced a 41% revenue growth and a 29% earnings increase due to rate increases [14] - Hedging strategies helped mitigate the impact of falling natural gas prices, resulting in only a 1% decline in average realized prices [14] Long-term Outlook - National Fuel Gas has significant natural gas reserves, with approximately 1.2 million acres in Pennsylvania containing over 4.5 trillion cubic feet of natural gas equivalent, providing a long-term development inventory [14] - The company is well-positioned for potential recovery in natural gas prices, despite current low prices [14]

Can NFG Sustain Dividend Hikes? NFG has the potential to expand and improve even further, which suggests that management will have sufficient funds to continue with its shareholder-friendly activities in the future. This increase resulted in an annualized dividend of $2.06 per share compared with the previous level of $1.98. National Fuel Gas' current dividend yield is 3.6%, higher than the Zacks S&P 500 composite's average of 1.36%. Since 2010, National Fuel Gas Company has invested $2.7 billion in midstre ...

WILLIAMSVILLE, N.Y., June 13, 2024 (GLOBE NEWSWIRE) -- Today, the National Fuel Gas Company ("National Fuel" or the "Company") (NYSE: NFG) Board of Directors approved a 4.0% increase in the dividend on the Company's common stock, raising the quarterly rate from 49.5 cents per share as approved in June 2023 to 51.5 cents per share for an annual rate of $2.06 per share. This dividend is payable July 15, 2024, to stockholders of record at the close of business on June 28, 2024. The Company has approximately 91 ...

Core Viewpoint - National Fuel Gas Company has a long-standing history of dividend payments and has recently approved a dividend increase, reflecting its commitment to returning value to shareholders [1][2]. Dividend Increase - The Board of Directors approved a 4.0% increase in the quarterly dividend, raising it from 49.5 cents per share to 51.5 cents per share, resulting in an annual rate of $2.06 per share [2]. - This dividend is payable on July 15, 2024, to stockholders of record as of June 28, 2024 [4]. Company Overview - National Fuel is a diversified energy company based in Western New York, operating across four business segments: Exploration & Production, Pipeline & Storage, Gathering, and Utility [3]. - The company has approximately 91.8 million shares of common stock outstanding and no preferred stock [4].

Financial Data and Key Metrics Changes - National Fuel reported adjusted operating results of $1.79 per share, a 16% increase from the prior year's second quarter [7] - Earnings per share from regulated businesses increased by 36%, while Seneca's production and gathering segment's throughput also saw double-digit growth [8] - Pipeline and Storage segment earnings were up 29% year-over-year, driven by a $13 million increase in revenues due to a rate case settlement [34] Business Line Data and Key Metrics Changes - Seneca's quarterly production was 103 Bcfe, a 10% increase over the second quarter of fiscal 2023, despite voluntary pricing curtailments of over 5 Bcf [28] - The adjusted EBITDA for the E&P and Gathering segments increased by 12% [55] - The utility business saw earnings improve by 41% compared to last year's second quarter, with margin growth of $14 million [55] Market Data and Key Metrics Changes - Natural gas prices were a headwind during the quarter, with NYMEX averages expected to drop by $0.40 from the previous quarter [23] - 74% of remaining production is fully hedged at prices significantly above current market levels, providing some insulation against price volatility [23] - The company anticipates natural gas prices will remain under pressure in the near term due to supply-demand fundamentals [30] Company Strategy and Development Direction - The company aims to capitalize on long-term growth opportunities through modernization investments in regulated businesses, which are expected to deliver mid to high single-digit growth in rate base [18] - National Fuel has initiated a $200 million share buyback program, reflecting confidence in long-term value despite near-term price challenges [27] - The transition to an eastern development area (EDA) is expected to enhance production efficiency and reduce capital deployment in Seneca's development program [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for natural gas prices, driven by LNG export projects and increasing demand for natural gas power generation [10] - The company is well-positioned to navigate near-term price volatility through its hedging strategy and integrated business model [40] - Management highlighted the importance of regulatory environments and infrastructure challenges in meeting future energy demands [41] Other Important Information - The company has successfully settled a rate case with its FERC-regulated Supply Corporation, which is expected to increase annual revenues by $56 million [14] - A weather normalization clause in the rate structure is expected to reduce margin volatility in Pennsylvania [16] - The Tioga Pathway Project is progressing, with an FERC application expected to be filed for a late 2026 service date [19] Q&A Session Summary Question: Can you talk about your outlook for curtailments? - Management indicated minimal exposure to curtailments for the remainder of the year, with only about 10 Bcf exposed due to proactive measures taken [60] Question: What is driving the change in utility operating income growth guidance? - The change is primarily due to weather impacts, which have caused variability outside the expected range, affecting earnings projections [62] Question: How does the company view M&A opportunities in the current environment? - Management remains interested in adding regulated assets and is actively looking for opportunities [76]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from____ to_____ Commission File Number 1-3880 NATIONAL FUEL GAS COMPANY (Exact name of registrant as specified in its charter) New Jersey 13-1086010 (State ...

National Fuel Gas Company (NFG) reported fiscal second-quarter 2024 adjusted operating earnings of $1.79 per share, which surpassed the Zacks Consensus Estimate of $1.41 by 26.9%. The bottom line also increased 16.2% from the year-ago quarter’s reported figure of $1.54.GAAP earnings for the quarter were $1.80 per share, up 17.6% from the year-ago level of $1.53.Total RevenuesNFG reported sales of $629.9 million, which missed the Zacks Consensus Estimate of $679 million by 7.2%. The top line also declined 12 ...

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Q2 FY2024 Key Financial Results](index=1&type=section&id=Q2%20FY2024%20Key%20Financial%20Results) National Fuel Gas Company reported strong Q2 FY2024 financial results, with GAAP net income per share up 18% to $1.80 and adjusted operating results per share up 16% to $1.79, driven by regulated businesses Q2 FY2024 Financial Highlights (YoY) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | GAAP Net Income | $166.3 million | $140.9 million | +18.0% | | GAAP EPS | $1.80 | $1.53 | +17.6% | | Adjusted Operating Results | $165.3 million | $141.8 million | +16.6% | | Adjusted Operating Results EPS | $1.79 | $1.54 | +16.2% | - The strong performance was led by the regulated businesses (Pipeline & Storage and Utility), which collectively delivered earnings growth of **36%**, mainly due to favorable rate case resolutions[4](index=4&type=chunk) - The company initiated a new **$200 million** share buyback program during the second quarter, enhancing its commitment to shareholder returns[6](index=6&type=chunk) [FY2024 Guidance Update](index=2&type=section&id=FISCAL%202024%20GUIDANCE%20UPDATE) The company revised its FY2024 earnings guidance downwards to $4.75-$5.05 per share, reflecting lower natural gas price assumptions and production curtailments, partially offset by increased Pipeline and Storage revenue FY2024 Guidance Revision | Guidance Metric | Previous FY 2024 | Updated FY 2024 | Change at Midpoint | | :--- | :--- | :--- | :--- | | Adjusted EPS | $4.90 - $5.20 | $4.75 - $5.05 | -$0.15 | | Consolidated Capital Expenditures | $885 - $1,000 million | $885 - $980 million | -$10 million | | Net Production (Bcf) | 395 - 410 | 390 - 405 | -7.5 Bcf | | Pipeline & Storage Revenues | $380 - $420 million | $400 - $420 million | +$10 million | - The earnings guidance revision is primarily due to a lower NYMEX natural gas price assumption for the remainder of the fiscal year, now at **$2.00/MMBtu**, down from **$2.40/MMBtu**[10](index=10&type=chunk)[11](index=11&type=chunk)[49](index=49&type=chunk) - The production forecast was lowered to account for approximately **5 Bcf** of price-related curtailments that occurred in the second quarter due to low in-basin pricing[12](index=12&type=chunk) [Segment Performance Analysis](index=3&type=section&id=DISCUSSION%20OF%20SECOND%20QUARTER%20RESULTS%20BY%20SEGMENT) [Upstream Business (Exploration & Production)](index=3&type=section&id=Upstream%20Business) The Exploration and Production segment (Seneca) saw Q2 GAAP earnings rise slightly to $62.1 million, driven by a 10% increase in natural gas production to 102.9 Bcf, with hedging mitigating price declines E&P Segment Q2 Financials (in thousands) | Metric | Q2 2024 | Q2 2023 | Variance | | :--- | :--- | :--- | :--- | | GAAP Earnings | $62,065 | $60,982 | +$1,083 | | Adjusted Operating Results | $61,676 | $62,776 | -$1,100 | | Adjusted EBITDA | $172,068 | $154,574 | +$17,494 | - Natural gas production increased by **10%** YoY to **102.9 Bcf**, driven by new wells in the EDA, despite **5 Bcf** of price-related curtailments[22](index=22&type=chunk) - Average realized natural gas price was **$2.56 per Mcf**. While pre-hedging prices fell **29%**, hedging gains of **$0.58 per Mcf** offset most of the decline[23](index=23&type=chunk) - DD&A expense increased by **$0.08 per Mcf** to **$0.71 per Mcf**, driven by higher production and an increased full cost pool[25](index=25&type=chunk) [Midstream Businesses](index=4&type=section&id=Midstream%20Businesses) Midstream businesses showed strong Q2 growth, with Pipeline and Storage earnings up 29% to $30.7 million due to a rate case, and Gathering earnings up 18% to $28.7 million from increased throughput [Pipeline and Storage Segment](index=4&type=section&id=Pipeline%20and%20Storage%20Segment) The Pipeline and Storage segment's Q2 GAAP earnings increased by $6.9 million to $30.7 million, primarily driven by higher transportation and storage rates from a rate case settlement Pipeline & Storage Segment Q2 Financials (in thousands) | Metric | Q2 2024 | Q2 2023 | Variance | | :--- | :--- | :--- | :--- | | GAAP Earnings | $30,737 | $23,858 | +$6,879 | | Adjusted EBITDA | $70,033 | $58,926 | +$11,107 | - Operating revenues increased by **$12.9 million**, mainly due to higher transportation and storage rates from the Supply Corporation rate case settlement, which is expected to increase annual revenues by **$56 million**[7](index=7&type=chunk)[29](index=29&type=chunk) [Gathering Segment](index=4&type=section&id=Gathering%20Segment) The Gathering segment's Q2 GAAP earnings rose by $4.4 million to $28.7 million, driven by a 15% increase in throughput from both affiliated and third-party producers Gathering Segment Q2 Financials (in thousands) | Metric | Q2 2024 | Q2 2023 | Variance | | :--- | :--- | :--- | :--- | | GAAP Earnings | $28,706 | $24,334 | +$4,372 | | Adjusted EBITDA | $53,103 | $46,263 | +$6,840 | - Operating revenues grew by **$7.0 million** (**12%**), driven by a **15%** increase in throughput from both Seneca and third-party producers[7](index=7&type=chunk)[32](index=32&type=chunk) [Downstream Business (Utility)](index=5&type=section&id=Downstream%20Business) The Utility segment's Q2 GAAP earnings surged 41% to $44.7 million, primarily due to higher customer margins from a base rate increase in its Pennsylvania jurisdiction Utility Segment Q2 Financials (in thousands) | Metric | Q2 2024 | Q2 2023 | Variance | | :--- | :--- | :--- | :--- | | GAAP Earnings | $44,739 | $31,720 | +$13,019 | | Adjusted EBITDA | $78,326 | $65,820 | +$12,506 | - Customer margin increased by **$14.4 million**, largely due to a **$23 million** annual rate increase in the Pennsylvania jurisdiction[36](index=36&type=chunk) - The company recovered approximately **$4.6 million** from the Pennsylvania weather normalization adjustment (WNA) mechanism, which helped mitigate the impact of warmer weather[36](index=36&type=chunk) - The segment's effective income tax rate was reduced due to increased tax deductions related to repairs and maintenance expenditures, following updated IRS guidance[38](index=38&type=chunk) [Consolidated Financial Statements](index=13&type=section&id=Consolidated%20Financial%20Statements) [Summary of Operations](index=13&type=section&id=Summary%20of%20Operations) Q2 consolidated operating revenues decreased to $629.9 million due to lower Utility revenues, but operating income increased to $250.6 million from $221.4 million, resulting in higher net income of $166.3 million Consolidated Operations Summary - Three Months Ended March 31 (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Operating Revenues | $629,939 | $717,261 | | Total Operating Expenses | $379,316 | $495,884 | | Operating Income | $250,623 | $221,377 | | Net Income | $166,272 | $140,880 | [Consolidated Balance Sheet](index=14&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to $8.68 billion from $8.28 billion, driven by Net Property, Plant, and Equipment, with Total Comprehensive Shareholders' Equity growing to $3.30 billion Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 | Sept 30, 2023 | | :--- | :--- | :--- | | Total Assets | $8,677,025 | $8,280,260 | | Net Property, Plant and Equipment | $7,507,507 | $7,299,862 | | Total Liabilities | $5,373,552 | $5,316,884 | | Total Comprehensive Shareholders' Equity | $3,303,473 | $2,963,376 | [Consolidated Statement of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended March 31, 2024, net cash from operations decreased to $586.3 million, while cash used in investing remained flat and cash used in financing significantly decreased to $107.8 million Cash Flow Summary - Six Months Ended March 31 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $586,261 | $711,209 | | Net Cash Used in Investing Activities | ($483,147) | ($484,649) | | Net Cash Used in Financing Activities | ($107,792) | ($292,745) | | Net Decrease in Cash | ($4,678) | ($66,185) | [Operational Data and Outlook](index=22&type=section&id=Operational%20Data%20and%20Outlook) [Key Operational Statistics](index=22&type=section&id=Key%20Operational%20Statistics) Q2 FY2024 saw Appalachian gas production grow 10% to 102.9 Bcf and Gathering volumes increase 15% to 125.6 Bcf, while Pipeline and Storage throughput decreased 3.5% and Utility throughput declined 2% Q2 Operational Volume Changes (YoY) | Segment | Metric | Q2 2024 (MMcf) | Q2 2023 (MMcf) | % Change | | :--- | :--- | :--- | :--- | :--- | | Exploration & Production | Production | 102,883 | 93,241 | +10.3% | | Gathering | Volume | 125,565 | 109,344 | +14.8% | | Pipeline & Storage | Throughput | 223,529 | 231,700 | -3.5% | | Utility | Throughput | 54,183 | 55,323 | -2.1% | [Hedging Summary](index=23&type=section&id=Hedging%20Summary) The company employs a robust hedging program, with 147 Bcf of natural gas production hedged for the remainder of FY2024 and significant positions extending through FY2028 to manage commodity price risk - For the rest of FY2024, **147.0 Bcf** is hedged through a combination of swaps, collars, and fixed-price sales[84](index=84&type=chunk) - For FY2025, the company has hedged **221.5 Bcf**, with NYMEX swaps averaging **$3.50/MMBTU** and collars providing a floor of **$3.49/MMBTU**[84](index=84&type=chunk) - Hedging extends out to fiscal **2030**, demonstrating a long-term strategy to lock in prices and reduce volatility[84](index=84&type=chunk)