Industry Overview - Natural gas distribution companies transport natural gas from production regions to consumers across the U.S., with a significant underground pipeline network of 2.6 million miles [2] - The shale revolution has increased natural gas production, leading to higher demand due to its clean-burning nature [2] - The U.S. has 3,353 trillion cubic feet of natural gas, and the industry faces challenges such as aging infrastructure and rising investment costs due to interest rate hikes [2] Future Outlook - The U.S. Energy Information Administration (EIA) projects that domestic dry natural gas production will increase in 2025, particularly in the Permian Basin [3] - EIA expects U.S. liquefied natural gas (LNG) export volumes to rise by 25% year-over-year in 2025 and by 6.7% in 2026, highlighting the importance of gas pipelines for transportation to export terminals [3] Interest Rate Impact - 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, allowing for easier access to financing for infrastructure upgrades [4] - Further rate cuts are anticipated in 2026, which would positively impact utility operators planning large investments [4] Competitive Landscape - Natural gas faces increasing competition from renewable energy sources, which are becoming cheaper and more reliable due to advancements in technology and battery storage [5] - The rise of on-site generation reduces reliance on long-distance infrastructure, posing economic risks for new pipeline investments [5] Industry Performance - The Zacks Utility Gas Distribution industry currently ranks 190, placing it in the bottom 22% of the 245 Zacks industries, indicating weak near-term prospects [6] - Earnings estimates for the industry have decreased by 20.9% since September 31, 2024, reflecting a negative outlook [7] Stock Market Performance - Over the past year, the Gas Distribution industry has gained 6.5%, outperforming the Utility sector's growth of 5.4% but lagging behind the Zacks S&P 500 composite's 19.9% increase [9] Valuation Metrics - The industry is trading at a trailing 12-month EV/EBITDA ratio of 11.28X, compared to 18.35X for the Zacks S&P Composite 500 and 15.06X for the sector [12] - Historical trading ranges for the industry have been between 9.55X and 12.4X, with a median of 10.9X over the past five years [12] Company Highlights - **Sempra Energy (SRE)**: Plans to invest $56 billion from 2025-2029, with a current dividend yield of 3.09% and long-term earnings growth projected at 7.01% [18][19] - **Atmos Energy (ATO)**: Invested $2.94 billion in fiscal 2024 and plans to invest $3.7 billion in fiscal 2025, with a current dividend yield of 2.1% and long-term growth of 7.32% [22][23] - **New Jersey Resources (NJR)**: Aims to invest $650-$770 million in fiscal 2025 and $655-$835 million in fiscal 2026, with a current dividend yield of 3.82% [26][27] - **ONE Gas Inc. (OGS)**: Plans to invest $4 billion through 2029, with a current dividend yield of 3.53% and long-term growth projected at 5.56% [30][31]

Core Insights - Entergy has successfully completed the sale of its natural gas distribution business to Delta Utilities, allowing the company to focus on its growing electric utility operations [1][3] - The transaction includes approximately 3,700 miles of natural gas pipelines and 2,200 miles of service lines, serving around 204,000 homes and businesses in Baton Rouge and New Orleans [2] - The sale received all necessary regulatory approvals, indicating a smooth transition process for gas customers [3] Company Focus - The sale enables Entergy to sharpen its focus on electric operations and invest in a more resilient energy future [3] - Entergy Louisiana and Entergy New Orleans provide electric service to over 1.1 million and 209,000 customers respectively, highlighting the company's significant presence in the region [5] - Entergy is committed to investing in cleaner energy generation, including modern natural gas, nuclear, and renewable energy sources [5]

Core Viewpoint - ONE Gas, Inc. has announced a public offering of 2,500,000 shares of its common stock, aiming for gross proceeds of approximately $197.5 million, with the offering expected to close on May 12, 2025 [1][4]. Group 1: Offering Details - The public offering is priced at approximately $197,500,000, assuming no additional shares are purchased by the underwriter [1]. - ONE Gas has granted the underwriter an option to purchase up to 375,000 additional shares [1]. - The forward sale agreement involves selling 2,500,000 shares, with a potential increase to 2,875,000 shares if the underwriter's option is fully exercised [3]. Group 2: Financial Implications - ONE Gas will not initially receive proceeds from the forward sale unless it is required to sell shares directly to the underwriter [4]. - The company intends to use any net proceeds for general corporate purposes, including debt repayment, working capital, and capital expenditures [4]. Group 3: Company Overview - ONE Gas is a regulated natural gas utility, trading under the symbol "OGS" on the New York Stock Exchange [7]. - The company serves over 2.3 million customers across Kansas, Oklahoma, and Texas, with divisions including Kansas Gas Service, Oklahoma Natural Gas, and Texas Gas Service [8].