Group 1 - The article expresses a beneficial long position in the shares of FOJCF, indicating a positive outlook on the company's stock performance [1] - The author emphasizes the importance of conducting due diligence and research before making any investment decisions, highlighting the risks associated with short-term trading and options trading [2] - It is noted that past performance does not guarantee future results, and the views expressed may not reflect those of the platform as a whole [3]

Core Viewpoint - Northwest Natural Holding Company (NYSE:NWN) is recognized as one of the best utility stocks for dividends in 2026, indicating strong investor interest and potential for income generation [1]. Financial Performance - The company reported Q4 2025 adjusted earnings of $1.39 per share, exceeding estimates by $0.03, while revenue was just over $394 million, falling short of expectations by nearly $26 million despite a 6% year-over-year growth [3]. - For the full year 2025, Northwest Natural achieved a record adjusted EPS of $2.93 and targeted an EPS range of $2.95 to $3.15 for FY 2026, aiming for a compound annual growth rate (CAGR) of 4%-6% through 2030 [4]. Market Position and Analyst Ratings - Stifel raised its price target for Northwest Natural from $52 to $58, suggesting an upside of over 11% from the current share price, while maintaining a 'Buy' rating on the shares following the utility's Q4 results [2][7]. - The company operates natural gas distribution utilities in the Pacific Northwest and Texas, along with water and wastewater utilities across six states, highlighting its diversified utility operations [2].

Industry Overview - Natural gas distribution companies transport natural gas from production regions to consumers across the U.S., with a vast pipeline network of nearly 2.5 million miles [1][3] - The U.S. holds approximately 3,353 trillion cubic feet of natural gas resources, and the demand for clean-burning natural gas is expected to rise, creating opportunities for distribution companies [3] Key Trends - Aging infrastructure poses operational challenges, with many pipelines nearing the end of their service life, raising safety and maintenance concerns [4] - Increasing competition from renewable energy sources is impacting natural gas demand, as advancements in technology lower costs for utility-scale renewable projects [5] - A decline in interest rates, with the Federal Reserve reducing rates by 175 basis points, is beneficial for capital-intensive utilities, facilitating infrastructure investments [6] Industry Performance - The Zacks Utility Gas Distribution industry ranks 155, placing it in the bottom 36% of the 243 Zacks industries, indicating weak near-term prospects [7][8] - Over the past year, the Gas Distribution industry gained 24.5%, outperforming the Zacks S&P 500 composite's 24.4% but lagging behind the Utility sector's 27.5% growth [10] Valuation Metrics - The industry is trading at a trailing 12-month EV/EBITDA ratio of 12.8X, lower than the Zacks S&P 500 composite's 17.73X and the sector's 14.86X [13] Company Highlights - **Atmos Energy Corporation (ATO)**: Plans to invest $3.6 billion in fiscal 2025 and $4.2 billion in fiscal 2026 to enhance infrastructure, with a current dividend yield of 2.16% and projected earnings growth of 10.19% and 6.49% for fiscal 2026 and 2027, respectively [19][20] - **Northwest Natural Holdings (NWN)**: Provides services to over 1 million customers, with capital expenditures expected between $500 million to $550 million for 2026 and $2.6 billion to $2.9 billion from 2026 to 2030, and a dividend yield of 3.77% [23][24] - **Spire Inc. (SR)**: Anticipates a 10-year capital investment of $11.2 billion through fiscal 2035, with a dividend yield of 3.59% and projected earnings growth of 15.77% and 11.54% for fiscal 2026 and 2027, respectively [27]

Core Insights - The company reported record adjusted earnings per share (EPS) of $2.93 for 2025, an increase from $2.33 in 2024, driven by new rates in Oregon, strong organic customer growth, and diversification into the water utility business [2][7][3] - The water segment contributed $0.35 per share, exceeding expectations, due to new rates at its largest Arizona utility and additional revenue from a late 2024 acquisition [1] Financial Performance - Full-year 2025 adjusted EPS was $2.93, reflecting a growth of 25.8% from 2024 [2] - The company initiated 2026 adjusted EPS guidance of $2.95–$3.15, with SiEnergy and Water expected to contribute about 25% of consolidated earnings [18][7] Strategic Initiatives - The company emphasized a "new chapter" marked by record earnings, strong customer growth, and a larger capital investment program across its gas and water businesses [4] - The MX3 gas-storage expansion project at Mist is expected to add 4–5 billion cubic feet (BCF) of storage capacity, with an estimated cost of $300 million and targeted in-service by the end of 2029 [6][10] Regulatory and Funding Plans - A settled Oregon rate case will raise customer rates by 1.5% effective October 31, 2026, as part of a long-term capital expenditure plan of $2.6–$2.9 billion through 2030 [5][8] - The company expects to fund its 2026 capital program through operating cash flow, approximately $150 million in net new debt, and $40–$50 million in equity issuance [19] Customer Growth and Market Expansion - SiEnergy achieved 18% organic customer growth in 2025 and is expected to continue growing at 15%–20% annually through 2030 [15][16] - The water segment is projected to generate 2%–3% organic customer growth through 2030 and contribute 10%–15% of consolidated EPS in 2026 [17] Shareholder Returns - The company marked its 70th consecutive year of dividend growth and expects higher growth in dividends while targeting a long-term payout ratio of 55%–65% [20]

Core Insights - Northwest Natural Holding Company (NYSE:NWN) is recognized as one of the 14 value stocks to buy with high dividend yields [1] Financial Performance - The company reported record adjusted earnings per share for Q4 2025, achieving the high end of its guidance range [2] - Customer growth reached its strongest level in nearly 20 years, attributed to significant capital investment [2] Strategic Initiatives - The introduction of the MX3 storage expansion project aims to enhance reliability and increase capacity in the Pacific Northwest [3] - The project is expected to support the company's long-term earnings growth target of 5% to 7% once approved [3] Regulatory Developments - The company resolved its Oregon rate case in 2025, with new rates effective from October 31 [4] - In Washington, a settlement in principle was reached regarding the revenue requirement portion of the case, providing clarity for future operations [4] Future Outlook - The company provided adjusted earnings per share guidance for 2026 in the range of $2.95 to $3.15 [5] - Long-term expectations indicate adjusted earnings per share growth at a compound annual rate of 4% to 6% from 2025 through 2030 [5] - Northwest Natural serves nearly one million meters across seven states, providing energy, water, and wastewater services [5]

Customer Base and Service Area - NW Natural serves approximately 810,000 meters, with 88% of customers located in Oregon and 12% in southwest Washington[28]. - Residential and commercial customers account for approximately 60% of NWN Gas Utility volumes delivered and about 91% of its margin[30]. - In 2025, natural gas was present in approximately 64% of single-family residential homes in NW Natural's service territory[33]. - SiEnergy serves approximately 90,000 meters in Texas, with residential and commercial customers accounting for 88% of volumes and 93% of margin in 2025[76][77]. Gas Supply and Storage - For the 2025-26 winter heating season, NWN Gas Utility projects a total supply of 10 million therms, with firm supply purchases and Mist underground storage each contributing 34%[44]. - Approximately 60% of gas supply in 2025 came from Canada, with the remainder primarily from the U.S. Rocky Mountain region[48]. - In 2025, NW Natural purchased a total of 784 million therms, with 40% from long-term contracts, 41% from short-term contracts, and 19% from spot purchases[52]. - NW Natural's gas storage facilities have a total designed capacity of approximately 19.9 Bcf, with maximum daily deliverability of 7.0 million therms[50]. - The Mist gas storage facility has a total capacity of 21.6 Bcf, with 13.1 Bcf dedicated to NW Natural Gas Utility customers and 4.4 Bcf serving interstate customers[68][71]. - In 2025, NW Natural plans a 4-5 Bcf expansion at the North Mist gas storage facility, pending customer approval and market demand[75]. Regulatory Environment - The company operates under regulatory oversight from the OPUC and WUTC, which authorize rates and recovery mechanisms for capital and operating costs[38]. - NW Natural's gas distribution rates are designed to recover costs without earning a return on the gas commodity sold, with annual resets through the Purchased Gas Adjustment (PGA) mechanism[55]. - The company is subject to compliance with Washington's Climate Commitment Act and Oregon's Climate Protection Program, with costs included in customer rates[60]. - Regulatory risks include potential adverse impacts from changes in the regulatory environment and the approval of rates by regulatory authorities, which could affect financial results[132]. - Legislative changes, such as Oregon House Bill 3179, restrict the company from filing new general rate cases, which could delay cost recovery and affect financial flexibility[137]. - The company is subject to various governmental regulations, and changes in these regulations could adversely affect financial condition and results of operations[138]. Environmental and Climate Considerations - The company has implemented an emissions screening tool to prioritize purchases from lower emitting gas producers, aiming to reduce carbon emissions[56]. - The Oregon Climate Protection Program mandates a 50% reduction in GHG emissions by 2035 and 90% by 2050 from a 2017-2019 baseline, impacting operational costs[193]. - The Washington Climate Commitment Act requires a 95% reduction in GHG emissions below 1990 levels by 2050, affecting compliance costs and operational strategies[193]. - Climate change poses physical risks, including increased storm intensity and water scarcity, which could disrupt gas production and transportation systems[188]. - Compliance with evolving environmental regulations may increase operational costs and could be non-recoverable in customer rates, adversely affecting financial condition[186]. - Public sentiment and policy changes regarding natural gas could adversely affect financial condition and operational results[191]. - NW Natural is facing potential operational restrictions and additional costs due to new legislation and regulations aimed at reducing carbon emissions, which could adversely impact customer growth and usage[194]. - The company has been named as a defendant in two legal proceedings related to climate change impacts, which could result in costly litigation and negatively affect its financial condition[194]. Workforce and Employee Relations - NW Natural's workforce consisted of 1,619 employees as of December 31, 2025, including 638 unionized employees[117]. - NW Natural's unionized employees ratified a collective bargaining agreement that includes a 6% wage increase effective June 1, 2024[117]. - A significant portion of the workforce is eligible for retirement within the next five years, prompting the company to focus on attracting, training, and retaining skilled workers to prevent knowledge loss[123]. - The company has implemented various employee development programs, including a mentoring program, tuition assistance, and ongoing management training[124]. - The company regularly monitors employee engagement and satisfaction through annual surveys to gather feedback from employees[125]. - Approximately 39% of NW Holdings' total workforce is represented by a union, and disputes over collective bargaining agreements could lead to labor disruptions impacting service delivery[179]. Financial Performance and Risks - NWN Water's utility services accounted for 87% of operating revenues in 2025, with 64% from regulated utilities and 23% from sole provider services[93]. - Customer growth for NWN Water primarily comes from single-family housing, multifamily housing, and commercial building new construction[96]. - The financial condition of counterparties in gas reserves arrangements, such as Jonah Energy, could impact NW Natural's ability to recover costs[154]. - NW Holdings' ability to pay dividends is dependent on the financial performance of its subsidiaries, particularly NW Natural, which is subject to regulatory restrictions based on credit ratings and equity levels[209]. - Changes in pension assets and liabilities could adversely affect NW Holdings' and NW Natural's financial condition, particularly in the context of sustained declines in equity markets[212]. - NW Holdings and NW Natural face credit and performance exposure to derivative counterparties, which could adversely affect financial results if counterparties fail to perform[216]. - Higher natural gas commodity prices and volatility may negatively impact NWN Gas Utility business and interstate gas storage operations, affecting overall cash flows[217]. - The cost of natural gas is influenced by various factors, including weather, demand changes, and economic conditions, leading to increased pricing and volatility in gas markets[218]. - Increased gas costs could pressure regulators to seek rate reductions, adversely affecting financial results[219]. - Temporary gas price increases can negatively impact operating cash flows and liquidity, with potential adverse effects on financial condition[220]. Operational Challenges - The company faces challenges related to regulatory lag, where costs incurred may not be recoverable until rate changes are approved, potentially impacting liquidity[134]. - Competition from alternative energy sources could negatively affect customer retention and growth rates, impacting financial performance[158]. - Increased operational risks from natural disasters and equipment malfunctions could lead to significant costs and lost revenues[162]. - Compliance with new safety regulations may result in increased operating costs that are not recoverable through customer rates[168]. - Reliance on third parties for natural gas and RNG supply poses risks, including potential disruptions and pricing issues[170]. - Joint ventures and partnerships may limit control over project management and expose the company to additional risks[152]. - The company relies on a single interstate pipeline for gas transportation, which poses a risk of service disruption if there are any limitations or inadequacies[174]. - The company’s gas storage operations depend on third-party pipelines, and any failure could adversely affect financial condition and cash flows[176]. - Local and national disasters pose a significant risk to NW Natural's operations, potentially leading to increased operating costs and disruptions in service[198]. - The company faces cybersecurity risks that could materially affect its financial condition and operations, especially with the increasing sophistication of cyber threats[205]. - The company is implementing a new gas control system, indicating ongoing investment in technology to improve operations[200]. - NW Holdings and NW Natural's hedging activities cannot fully eliminate risks associated with commodity price movements, which may adversely impact operating revenues and financial condition[213].

Financial Data and Key Metrics Changes - For the full year 2025, the company reported record-adjusted earnings per share of $2.93, compared to $2.33 per share for 2024, reflecting significant earnings growth driven by new rates in Oregon and strong organic customer growth [19][20] - The company generated approximately $270 million in cash provided by operating activities, about 35% above 2024 [20] - The company invested a record $467 million in systems related to safety, reliability, and technology, with 75% allocated to Northwest Natural Gas [21] Business Line Data and Key Metrics Changes - The Northwest Natural Gas utility segment saw adjusted earnings per share improve by $0.45, primarily due to new rates in Oregon [19] - SiEnergy contributed $0.33 per share for 2025, exceeding expectations, with an 18% organic customer growth [19][12] - The water segment contributed $0.35 per share, driven by new rates and additional revenues from an acquisition, marking a significant increase in earnings [20][15] Market Data and Key Metrics Changes - The company expects to achieve 2%-3% organic customer growth across its utilities through 2030, with SiEnergy and Water expected to outpace overall consolidated growth rates [16] - The company anticipates a consolidated capital expenditure of approximately $500 million-$550 million in 2026, with a five-year CapEx plan of $2.6 billion to $2.9 billion through 2030 [23] Company Strategy and Development Direction - The company is focused on disciplined execution and delivering consistent, growing earnings and returns for shareholders, with a long-term EPS growth target of 4%-6% [4][22] - The MX3 Gas Storage Expansion project is expected to enhance regional reliability and capacity, potentially increasing long-term earnings growth targets to 5%-7% once approved [6][12] - The company is diversifying into the water utility business and expanding into multiple jurisdictions, including Texas, to enhance long-term growth prospects [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for the next several years, emphasizing the importance of natural gas in meeting energy demand [8][10] - The company is optimistic about the growth in the Texas market, driven by industrial and commercial activity, and sees potential benefits from reduced mortgage rates [36][37] - Management highlighted the importance of maintaining affordable rates for customers while achieving growth targets [17] Other Important Information - The company has a strong dividend growth record, marking 70 consecutive years of dividend increases, with a target payout ratio of 55%-65% [17] - The company is committed to maintaining strong investment-grade credit ratings and funding its growth through a balanced mix of operating cash flows, long-term debt, and equity [24] Q&A Session Summary Question: Guidance and Growth Range - Management is comfortable with the current 4%-6% long-term EPS growth guidance without MX3, expecting to increase it to 5%-7% once the project achieves notice to proceed [27] Question: Notice to Proceed Timeline - Management expects to receive notice to proceed by the end of next year, with several milestones already achieved [28] Question: SiEnergy Growth Expectations - SiEnergy has exceeded growth expectations despite a slowdown in the Texas housing market, with strong additions to its customer backlog [29] Question: Rate Case Considerations - Management is contemplating a rate case for SiEnergy this year, evaluating factors including customer affordability [30] Question: Water Business Expansion - The company is focused on both organic growth and potential acquisitions in the water business, with a strong pipeline of opportunities [34] Question: Impact of Mortgage Rates on Growth - Management noted a recent uptick in housing development in Texas due to reduced mortgage rates, which is seen as a positive sign for future growth [36]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported record-adjusted earnings per share of $2.93, compared to $2.33 per share for 2024, reflecting significant earnings growth driven by new rates in Oregon and strong organic customer growth [19][20] - The company generated approximately $270 million in cash provided by operating activities, about 35% above 2024 [20] - The company invested a record $467 million in systems related to safety, reliability, and technology, with 75% allocated to Northwest Natural Gas [21] Business Line Data and Key Metrics Changes - The Northwest Natural Gas utility segment saw adjusted earnings per share improve by $0.45, primarily due to new rates in Oregon [19] - SiEnergy contributed $0.33 per share for 2025, exceeding expectations, with an 18% organic customer growth rate [19][12] - The water segment contributed $0.35 per share, driven by new rates and additional revenues from an acquisition, marking a significant increase in earnings [20][15] Market Data and Key Metrics Changes - The company expects to achieve consolidated organic customer growth of 2%-3% and rate-based growth of 6%-8% through 2030, supported by a planned capital expenditure of $2.6 billion-$2.9 billion [16][23] - SiEnergy is projected to generate between 10%-15% of consolidated earnings per share in 2026, with expectations of 15%-20% customer growth each year through 2030 [14][22] Company Strategy and Development Direction - The company is focused on disciplined execution and delivering consistent, growing earnings and returns for shareholders, with a long-term EPS growth target of 4%-6% [7][22] - The MX3 Gas Storage Expansion project is expected to enhance regional reliability and capacity, potentially increasing long-term earnings growth targets to 5%-7% once approved [6][12] - The company is diversifying into the water utility business and expanding into multiple jurisdictions, including Texas, to enhance long-term growth prospects [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for future growth, emphasizing the importance of natural gas in meeting energy demand [5][10] - The company anticipates another record year for capital investment and earnings in 2026, with a focus on returning capital to shareholders [17][24] - Management noted that the transition to multi-year rate cases will provide greater clarity and predictability for customers and utilities [8][9] Other Important Information - The company has a strong balance sheet with significant liquidity of approximately $590 million as of December 31, 2025 [21] - The dividend payout ratio is expected to moderate to 55%-65% over the next several years, with a commitment to returning capital to shareholders [24] Q&A Session Summary Question: Where does the company see itself within the existing growth range, and how does the MX3 project impact this? - Management is comfortable with the 4%-6% long-term EPS growth guidance without MX3, expecting to increase it to 5%-7% once the project achieves notice to proceed [27] Question: When is the expected notice to proceed for the MX3 project, and are there any potential delays? - The company expects notice to proceed by the end of next year, with several milestones already achieved [28] Question: How is SiEnergy performing relative to expectations, and is a rate case being considered? - SiEnergy has exceeded expectations with strong growth and record additions to its backlog, and a rate case is being contemplated [29][30] Question: What are the next steps for the water segment in terms of expansion and acquisitions? - The company is focused on both organic growth and opportunistic acquisitions, particularly in Texas, where growth has been strong [34][35] Question: Have recent changes in mortgage rates affected housing development and customer growth in Texas? - Management noted a recent uptick in housing activity due to lower mortgage rates, which is seen as a positive for long-term growth in Texas [36][37]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported record-adjusted earnings per share of $2.93, compared to $2.33 per share for 2024, reflecting significant earnings growth driven by new rates in Oregon and strong organic customer growth [18][19] - The company generated approximately $270 million in cash provided by operating activities, about 35% above 2024 [19] - The company invested a record $467 million in systems related to safety, reliability, and technology, with 75% allocated to Northwest Natural Gas [20] Business Line Data and Key Metrics Changes - The Northwest Natural Gas utility segment saw adjusted earnings per share improve by $0.45, primarily due to new rates in Oregon [18] - SiEnergy contributed $0.33 per share for 2025, with 18% organic customer growth and a backlog nearing 250,000 future meters, representing over a 30% increase in customer backlog [11][12] - The water segment contributed $0.35 per share, accounting for 12% of consolidated adjusted earnings per share, driven by new rates and acquisitions [14][19] Market Data and Key Metrics Changes - The company is positioned to address the growing energy demand in the Pacific Northwest, with the MX3 Gas Storage Expansion project expected to enhance regional reliability and capacity [5][9] - The Pacific Northwest Electric Grid faces a potential 9-gigawatt capacity shortfall by 2030, highlighting the importance of the company's storage capabilities [9] Company Strategy and Development Direction - The company aims to diversify into the water utility business and expand into multiple jurisdictions, including Texas, to enhance long-term growth prospects [4][5] - The transition to multi-year rate cases in Oregon and Washington is expected to create a more balanced and predictable earnings profile [7][8] - The company plans to maintain a strong balance sheet while targeting a long-term dividend payout ratio of 55%-65% [16][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and execution, anticipating another record year for capital investment and earnings in 2026 [16][25] - The company expects consolidated capital expenditures of approximately $500 million-$550 million in 2026, with a long-term EPS growth rate of 4%-6% reaffirmed [21][23] Other Important Information - The MX3 Gas Storage Expansion project is estimated to cost approximately $300 million and is expected to be in service by the end of 2029 [10] - The company is committed to returning capital to shareholders, with a focus on steady dividend increases [16][24] Q&A Session Summary Question: Guidance and Growth Range - Management is comfortable with the 4%-6% long-term EPS growth guidance without MX3, expecting to increase it to 5%-7% once the project achieves notice to proceed [27] Question: Notice to Proceed Timeline - The company expects notice to proceed by the end of next year, with several milestones already achieved [28] Question: SiEnergy Growth Expectations - SiEnergy has exceeded expectations with strong growth and record additions to its backlog, despite a slowdown in the Texas housing market [29] Question: Rate Case Considerations - Management is evaluating a rate case for SiEnergy, considering customer affordability and potential benefits from the GRIP mechanism [31][32] Question: Water Business Expansion - The company is focused on both organic growth and opportunistic acquisitions in the water business, with a robust M&A pipeline [33][34] Question: Impact of Mortgage Rates on Growth - Recent reductions in mortgage rates have shown a positive impact on housing development and customer growth in Texas [36][37]

Q4 2025 EARNINGS CALL February 27, 2026 Financial Updates Financial Updates Introduction Guidance Business Updates Investor Information Company Information NW Natural Holdings 250 SW Taylor Street Portland, OR 97204 nwnaturalholdings.com Nikki Sparley Director of Investor Relations and Assistant Treasurer (503) 721-2530 nikki.sparley@nwnatural.com FORWARD LOOKING STATEMENTS This and other presentations made by NW Natural Holdings from time to time, may contain forward-looking statements within the meaning o ...