Dividend Growth Stock Overview: Northwest Natural Gas Company

Northwest Natural Gas Company provides natural gas service to the 
metropolitan Portland, Oregon area.
Photo courtesy Jeff Gunn/flickr.com.

About Northwest Natural Gas Company

Northwest Natural Gas Company is a natural gas distribution and storage company serving over 705,000 residential, commercial, and industrial customers in western Oregon and southwestern Washington.  The company and its subsidiaries own and operate 31 billion cubic-feet of designed storage capacity in Oregon and California.  The company has been in business since 1859, and was incorporated in Oregon in 1910 and began doing business under its current name in 1997.  Northwest Natural Gas is headquartered in Portland, OR and employs about 1,000 people.

Northwest Natural Gas has two core business segments, the Utility Segment and the Storage Segment.  The Utility Segment, which accounts for nearly all of the company’s income, runs the company’s regulated local gas distribution business, which serves over 100 cities in 18 counties with an estimated total population of 3.5 million.  The segment receives about two-thirds of the needed gas supplies from Alberta and British Columbia provinces in Canada and the rest from the U. S. Rocky Mountain region.  Segment revenues are driven by the rates determined by the regulatory authorities and by the volume of gas delivered.  The volume of gas delivered is itself driven by customer growth.

The Storage Segment provides gas storage services for utilities, large industrial users, electric power companies and other customers.  The company signs agreements with customers of varying durations.  Most service agreements range from 1 – 10 years, but some can last as long as 28 years.  Segment revenue is driven by increased demand and, in the case of California-based storage, state renewable portfolio standards and carbon reduction targets.

In addition to the two segments noted above, the company also earned a small amount of money from the sales of appliances from the company’s store.

 

The company is a member of the S&P Small Cap 600 and Russell 2000 indices and trades under the ticker symbol NWN.

Northwest Natural Gas Company’s Dividend and Stock Split History

With a dividend growth record that dates back to 1956, Northwest Natural Gas has one of the longest records of year-over-year dividend growth among all publicly traded companies.  The company announces annual dividend increases in early October, with the stock going ex-dividend at the end of October.

Northwest Natural Gas has compounded its payout at an average rate of 1.4% over the last 5 years and 3.0% over the last 10 years.

Northwest Natural Gas has split its stock once in the last 20 years – a 3-for-2 split in September 1996.

Northwest Natural Gas Company’s Direct Purchase and Dividend Reinvestment Plans

Northwest Natural Gas has both direct purchase and dividend reinvestment plans. You do not need to be an investor in Northwest Natural Gas to participate in the plans. As a new investor, your initial investment must be at least $250. Subsequent direct investments have a minimum requirement of $25. The dividend reinvestment plan permits you to reinvest all or some of your dividends.

The fee structures of the plans are favorable to investors, as Northwest Natural Gas picks up the costs of stock purchases directly from the company. (Stock purchases made on the open market are subject to brokerage commissions.) When you sell your shares, you’ll pay a transaction fee of $15 and the associated brokerage fees, which will be deducted from the sales proceeds.

Helpful Links

Northwest Natural Gas Company’s Investor Relations Website

Current quote and financial summary for Northwest Natural Gas (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Northwest Natural Gas

 

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