Core Insights - The company reported a trailing 12-month utility return on equity (ROE) of 8.3% as of June 30, 2025, reflecting improvements in regulatory progress and cost management [6][29] - The Arizona Corporation Commission approved a capital tracker program, and Nevada enacted Senate Bill 417, allowing for alternative ratemaking for natural gas utilities, which is expected to enhance price stability and consumer protection [2][6] - The company successfully reduced its debt by over $470 million through follow-on offerings of Centuri Holdings, strengthening its balance sheet and moving towards a pure-play regulated natural gas business [2][6] Financial Performance - For the second quarter ended June 30, 2025, the company reported a net loss of $12.9 million, a decline of $31.2 million compared to the same period in 2024, primarily due to tax impacts from the sale of Centuri stock [8][9] - Adjusted net income for the second quarter was $38.6 million, representing a 71% increase compared to the same quarter in 2024 [8][29] - Year-to-date net income for 2025 was $100.987 million, a decrease of $5.1 million compared to the previous year, while adjusted net income was $37 million higher than the same period in 2024 [9][29] Operational Highlights - The company added approximately 40,000 new meter sets over the 12 months ending June 30, 2025, resulting in a customer growth rate of 1.8% [6] - The Great Basin Gas Transmission Company's 2028 Expansion Project saw increased capacity demand, rising to about 1.76 billion cubic feet per day from 1.25 billion cubic feet previously announced [3][6] - The company had $356 million in cash and over $1 billion in available liquidity as of June 30, 2025 [6] Segment Performance - The natural gas distribution segment contributed $33.677 million to net income in Q2 2025, up from $27.594 million in Q2 2024, while utility infrastructure services contributed $5.771 million [4][6] - Corporate and administrative net loss increased to $52.331 million in Q2 2025, impacted by tax expenses related to the Centuri stock sale [15][16] - Centuri's net loss improved by $17 million year-to-date, driven by higher work volume under master services agreements [13][16] Future Outlook - The company reaffirmed its 2025 net income guidance of $265 million to $275 million and capital expenditures of approximately $880 million to support customer growth and system improvements [17][19] - The company anticipates a compound annual growth rate (CAGR) of 6.0% to 8.0% for adjusted net income from 2025 to 2029 [19]

Group 1 - The company, Southwest Gas Holdings, Inc., will host its second quarter earnings conference call on August 6, 2025, at 11:00 AM ET [1] - A news release will be issued before the markets open on the same day [1] - The conference call will be available via live webcast on the company's website [1] Group 2 - Participants can join the call using the telephone number (800) 836-8184 or the international number (646) 357-8785 [2] - If unable to attend live, a digital replay will be available starting one hour after the call, accessible by dialing (888) 660-6345 or (646) 517-4150 [2] - The digital replay will be available until 4:30 PM ET on August 13, 2025, with the replay code 15251 [2]

Core Viewpoint - Southwest Gas (SWX) has a strong track record of exceeding earnings estimates and is well-positioned for continued success in upcoming quarterly reports [1][5]. Earnings Performance - For the last reported quarter, Southwest Gas achieved earnings of $1.65 per share, surpassing the Zacks Consensus Estimate of $1.61 per share, resulting in a surprise of 2.48% [2]. - In the previous quarter, the company was expected to report earnings of $1.15 per share but delivered $1.39 per share, leading to a significant surprise of 20.87% [2]. Earnings Estimates and Predictions - Recent estimates for Southwest Gas have been trending upward, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5][8]. - The current Earnings ESP for Southwest Gas stands at +8.00%, reflecting increased analyst optimism regarding the company's earnings prospects [8]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, suggesting that last-minute analyst revisions may provide more accurate predictions [7].

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - The Growth Style Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Style Score assesses stocks based on price trends and earnings outlook, utilizing factors like recent price changes and earnings estimate revisions [5] VGM Score - The VGM Score combines Value, Growth, and Momentum Scores, providing a comprehensive rating to identify stocks with the best overall potential [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in stock selection, with a historical average annual return of +25.41% for 1 (Strong Buy) stocks since 1988 [7][8] - There are over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down choices [9] Stock Example: Southwest Gas (SWX) - Southwest Gas Corporation is a regulated utility with a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating solid performance potential [11] - The company has a Value Style Score of B, supported by a forward P/E ratio of 20, making it attractive for value investors [11] - Recent upward revisions in earnings estimates have increased the Zacks Consensus Estimate to $3.72 per share for fiscal 2025, with an average earnings surprise of 6% [12]

Core Viewpoint - Southwest Gas (SWX) is positioned as a strong investment option in the Zacks Utility Gas Distribution industry due to its consistent infrastructure investments, customer growth, and effective debt management [1] Growth Forecast & Surprise History - The Zacks Consensus Estimate for SWX's 2025 earnings per share (EPS) has increased by 5.1% to $3.72 over the past 60 days [2] - The 2026 sales estimate is projected at $5.13 billion, reflecting a year-over-year growth of 6% [2] - SWX's long-term earnings growth rate is forecasted at 9.9%, with an average earnings surprise of 6% over the last four quarters [2] Debt Profile Overview - Southwest Gas has a total debt to capital ratio of 57.36%, which is better than the sector average of 59.23%, indicating a stronger financial position and lower reliance on borrowed funds [3] Strategic Capital Allocation Plan - The company plans to invest $4.3 billion in capital from 2025 to 2029 to meet the growing demand for energy solutions [4] - For 2025, capital expenditure is estimated at $880 million, aimed at customer growth, system enhancements, and pipe replacement initiatives [4] Customer Base Growth - Southwest Gas serves a diverse customer base across Arizona, Nevada, and California, having installed 40,000 first-time meter sets in the 12 months ending March 31, 2025 [5] - The company anticipates a 1.4% annual increase in customers through 2029, which is expected to enhance its performance [5] Return to Shareholders - The company has been consistently increasing shareholder value through dividends, currently paying a quarterly dividend of 62 cents per share, leading to an annualized dividend of $2.48 [6] - The current dividend yield stands at 3.36%, outperforming the Zacks S&P 500 Composite average of 1.25% [6] Stock Performance - In the past month, SWX shares have increased by 4.3%, compared to the industry's growth of 1.4% [9]

Company Overview - Southwest Gas (SWX) shares have increased by approximately 6.3% over the past month, outperforming the S&P 500 index [1] - The most recent earnings report is essential for understanding the key drivers behind this performance [1] Earnings Estimates - Estimates for Southwest Gas have trended downward in the past month, with a consensus estimate shift of -9.72% [2] - The downward revisions indicate a negative outlook for the stock [4] VGM Scores - Southwest Gas has a strong Growth Score of A but a low Momentum Score of F, while it holds a B grade for value, placing it in the top 40% for this investment strategy [3] - The aggregate VGM Score for the stock is A, which is significant for investors not focused on a single strategy [3] Industry Performance - Southwest Gas is part of the Zacks Utility - Gas Distribution industry, where ONE Gas (OGS) has gained 1.7% over the past month [5] - ONE Gas reported revenues of $935.19 million for the last quarter, reflecting a year-over-year increase of 23.3% [5] - ONE Gas is expected to post earnings of $0.54 per share for the current quarter, indicating a year-over-year change of +12.5% [6]

Industry Overview - Natural gas distribution pipelines are essential for delivering natural gas to consumers, with nearly 3 million pipelines in the U.S. [1] - Rising domestic natural gas output is driven by increased exports and public awareness of emissions reduction [2] - The natural gas sector requires consistent funding for maintenance and repair of aging infrastructure, with anticipated interest rate cuts expected to lower capital servicing costs [3] Demand and Growth Projections - Natural gas consumption for electricity generation is projected to contribute nearly 40% in 2025 and 2026 [5] - U.S. natural gas exports are expected to grow by 3.4 billion cubic feet per day (Bcf/d) in 2025 and 2.1 Bcf/d in 2026, with export volumes increasing by 8% in 2025 and 7% in 2026 [5] Company Comparisons - MDU Resources has a market capitalization of $3.43 billion, while Southwest Gas has $5.11 billion [6] - MDU's 2025 earnings per share (EPS) estimate has increased by 1.1% to 95 cents, while Southwest Gas's EPS estimate has increased by 4.8% to $3.72 [7] - MDU has a return on equity (ROE) of 9.86%, compared to Southwest Gas's 6.76%, both above the industry average of 9.24% [8] Financial Metrics - MDU has a lower debt-to-capital ratio of 44.44% compared to Southwest Gas's 57.36%, with the industry average at 50.49% [11] - MDU's stock has lost 0.5% over the past three months, while Southwest Gas has declined by 2.3% [10][12] - MDU's dividend yield is 3.1%, while Southwest Gas's is 3.49%, both exceeding the S&P 500 average of 1.24% [13] Valuation - Both companies are trading at a premium on a forward 12-month P/E basis, with MDU at 17.16X and Southwest Gas at 17.98X, compared to the industry average of 14.84X [14] Conclusion - Both MDU Resources and Southwest Gas are positioned well for growth, but MDU is favored due to its superior ROE, debt management, and stock performance [15]

Core Viewpoint - Southwest Gas Holdings, Inc. announces the successful closure of the Binding Open Season for the Great Basin Gas Transmission Company's 2028 Expansion Project, indicating high demand for natural gas in Northern Nevada [2][3]. Project Details - The Binding Open Season was initially set to close on April 30, 2025, but was extended to May 28, 2025, due to strong interest from shippers [4]. - The project aims to provide expanded firm transportation service starting November 1, 2028, with a minimum twenty-year term for each transportation service agreement [4]. - The anticipated expansion rate is between $14 and $17 per Dth per month, depending on the actual contracted capacity [4]. Estimated Impacts - The project is expected to provide incremental capacity totaling approximately 1.25 billion cubic feet per day [8]. - The estimated capital investment opportunity for the project ranges from approximately $800 million to $1.2 billion [8]. - The impacts of the project are contingent upon successful negotiations of binding agreements and final approval from the Federal Energy Regulatory Commission (FERC) [3][6]. Regional Importance - The expansion is projected to enhance the availability of reliable, on-demand energy in Northern Nevada, supporting economic development in the region [5]. Company Overview - Great Basin Gas Transmission Company operates an interstate pipeline system from the Idaho-Nevada border to the Nevada-California border and is subject to FERC jurisdiction under the Natural Gas Act [7]. - Southwest Gas Holdings, Inc. serves over 2 million customers across Arizona, Nevada, and California, focusing on safe and reliable natural gas service [9].

Industry Overview - The U.S. utilities sector has seen a significant rise in 2025, driven by macroeconomic, regulatory, and market-specific dynamics that have renewed investor interest [2] - The S&P 500 Utilities Select Sector SPDR (XLU) has advanced by 9% as of May 2025, indicating strong performance in the sector [2] - Falling treasury yields have enhanced the attractiveness of dividend-paying stocks, including utilities, as government bond yields become less competitive [3] Market Dynamics - The appeal of defensive stocks has increased due to ongoing concerns about inflation, potential Federal Reserve rate adjustments, and geopolitical instability [2] - The imposition of 25% tariffs on steel and aluminum imports has raised costs for essential materials in utility infrastructure, impacting supply chains and project expenses [4] - Despite tariff-related market uncertainties, investors continue to seek refuge in utility stocks, which are perceived as defensive havens [4] Company Highlights - Southwest Gas Holdings, Inc. (SWX) is a natural gas distributor with an expected earnings growth rate of 17.7% for the current year, and its earnings estimate has improved by 4.8% over the past 60 days [7] - New Jersey Resources Corporation (NJR) is also a natural gas distributor, with an expected earnings growth rate of 9.9% and a 2.9% improvement in earnings estimates over the past 60 days [8] - Telenor ASA (TELNY), a global telecommunications company, has an expected earnings growth rate of 17.1% and a 3.8% improvement in earnings estimates over the past 60 days [9] Investment Considerations - Utility stocks are generally viewed as long-term buy-and-hold options due to their regular dividend declarations and higher dividend yields compared to other equities [5] - The stocks of SWX, NJR, and TELNY benefit from investor rotation into stable, dividend-paying utility stocks, with strong growth and value indicators reflected in their VGM Scores and Zacks Ranks [10]

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific stocks, particularly Southwest Gas (SWX) and UGI, as potential undervalued opportunities based on various financial metrics [2][8]. Company Analysis: Southwest Gas (SWX) - SWX has a Zacks Rank of 2 (Buy) and an A grade in the Value category, indicating strong potential as a value stock [3]. - The PEG ratio for SWX is 1.92, which is lower than the industry average of 2.11, suggesting it may be undervalued relative to its expected earnings growth [4]. - SWX's P/S ratio is 1.07, compared to the industry's average of 1.6, further indicating potential undervaluation [5]. - The P/CF ratio for SWX is 7.70, which is attractive against the industry's average of 8.51, reinforcing the notion of SWX being undervalued [6]. Company Analysis: UGI - UGI also holds a Zacks Rank of 2 (Buy) with an A Value Score, making it another attractive option for value investors [7]. - UGI's forward earnings multiple is 11.54, significantly lower than the industry's P/E of 15.13, indicating potential undervaluation [7]. - The PEG ratio for UGI is 2.22, which is higher than SWX but still competitive against the industry average [7]. - UGI's P/B ratio is 1.54, compared to the industry's 1.18, suggesting it may be trading at a premium but still within a reasonable range [8].