Northwest Natural has a bizarre dividend streak
Strong track record but also mini hikes and a stock price going nowhere
Northwest Natural Holding (NWN) hiked its dividend by 0.5% last week, marking 69 consecutive years of increased dividends. This puts the utility company in the top-3 best track records (behind American States Water (AWR) with 70 years and Dover (DOV) with 69 years).
The Board of Directors of Northwest Natural Holding Company has increased the quarterly dividend to 49 cents per share on the Company’s common stock.
The dividend will be paid on Nov. 15, 2024 to shareholders of record on Oct. 31, 2024. The Company's indicated annual dividend rate is $1.96 per share. At a stock price of $39.84 the dividend yield is 4.9%.
BUT: our stats show some shocking facts when we look at the dividend hikes in the last decade AND the stock price.
The dividend has now been raised by 0.5% for 10 consecutive years. This is by far the weakest dividend growth of all companies with more than 25 consecutive years of increases.
So if you are attracted by the big fat 5% dividend yield, also look at the stock chart first. NWN stock has been going nowhere in the last decade, just as the dividend did.
This year the stock is up just 2.3% and if we look at the last decade, the stock has done almost nothing with an average annual return of 0.7%. Including dividends the return is better but NWN is the ultimate proof that a slow (or no) dividend growth also results in a stagnant stock price where as strong dividend growers mostly have soaring stock prices, certainly in the last decade.
If you are looking for a utility company with a similar (in this case better) track record than NWN, consider American States Water (AWR). American States Water has now raised the dividend 70 consecutive years with an average increase of 8% in the last decade.
The dividend yield for AWR is lower with 2.2% but it should be no surprise that AWR stock has returned 12% on average in the last decade vs. 0.7% for NWN.
Disclaimer: The information provided here is for informational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.