4 Gas Distribution Stocks to Accumulate in a Thriving Industry

Industry Overview - Natural gas distribution companies transport natural gas from production regions to consumers across the U.S., with a significant underground pipeline network [1][3] - The demand for natural gas is expected to rise, particularly during winter for heating and summer for electricity generation [1] Future Prospects - Natural gas production volumes are projected to increase in 2025, benefiting companies like Atmos Energy Corporation, Southwest Gas Corporation, New Jersey Resources Corporation, and Chesapeake Utilities [2][4] - The U.S. Energy Information Administration (EIA) forecasts a 16.7% year-over-year increase in U.S. liquefied natural gas (LNG) export volumes in 2025, with a further 14.2% increase expected in 2026 [4] Financial Environment - The Federal Reserve's recent interest rate cut of 100 basis points to a range of 4.25-4.5% is expected to benefit capital-intensive utilities by reducing borrowing costs [5] - Utilities are investing approximately $37 billion annually to enhance the reliability of natural gas distribution and transmission systems [6] Market Performance - The Zacks Utility Gas Distribution industry ranks 57, placing it in the top 23$3.7 billion in fiscal 2025 to strengthen infrastructure, with a current dividend yield of 2.25% [14][15] - Southwest Gas Corporation: Aims to invest $4.3 billion from 2025-2029, with a current dividend yield of 3.45$1.5-$1.8 billion over five years, with a current dividend yield of 2.56% [23][24]