- If you are wondering whether Northwest Natural Holding is fairly priced or not, you are not alone. This article will help you make sense of where the current share price stands.
- The stock closed at US$51.94 recently, with returns of 7.5% over the last 30 days, 11.1% year to date, and 32.1% over the past year. These figures can change how investors think about both upside potential and risk.
- Recent moves in the share price sit alongside ongoing coverage of Northwest Natural Holding's position as a regulated utility and its role in regional energy infrastructure. These topics often influence how investors view stability and income potential. News flow around regulation, capital projects, and utility sector sentiment helps set the backdrop for how the market is currently treating the stock.
- Our valuation checks currently give Northwest Natural Holding a 0 out of 6 valuation score. Next, we will walk through the main valuation approaches investors tend to use, then finish with a different way of thinking about value that ties them all together.
Northwest Natural Holding scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Northwest Natural Holding Dividend Discount Model (DDM) Analysis
The Dividend Discount Model looks at a stock through the dividends you expect to receive in the future, then estimates what those cash payments are worth in today’s dollars.
For Northwest Natural Holding, the model uses an annual dividend per share of about US$2.06, a return on equity of 7.36%, and a payout ratio of roughly 72.73%. That payout level implies the company is retaining just over one quarter of its earnings, which in turn feeds into an estimated dividend growth rate of about 2.01%. This growth rate is calculated as the product of the retention ratio and return on equity, which is a standard DDM approach.
Based on these inputs, the DDM output suggests an intrinsic value of roughly US$41.51 per share. Compared with the recent share price of US$51.94, the model indicates the stock is about 25.1% more expensive than its DDM value, which points to a premium valuation based purely on expected dividends and growth.
Result: OVERVALUED
Our Dividend Discount Model (DDM) analysis suggests Northwest Natural Holding may be overvalued by 25.1%. Discover 47 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Northwest Natural Holding Price vs Earnings
For a profitable company like Northwest Natural Holding, the P/E ratio is a useful shorthand for how much investors are paying for each dollar of earnings. A higher or lower P/E can reflect what the market is willing to pay given expectations for future growth and how risky those earnings might be.
Northwest Natural Holding currently trades on a P/E of 19.05x. That sits above the Gas Utilities industry average P/E of about 14.81x and also above the peer group average of 18.23x. On the surface, that points to investors paying a richer price for the company compared with many of its industry peers.
Simply Wall St’s Fair Ratio for Northwest Natural Holding is 18.73x. This is a proprietary estimate of what a reasonable P/E could be, given factors such as the company’s earnings profile, its industry, profit margins, size and key risks. Because it incorporates these elements directly, the Fair Ratio can be more tailored than a simple comparison with broad industry or peer averages. With the current P/E of 19.05x sitting slightly above the Fair Ratio of 18.73x, the shares look modestly expensive on this metric.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your Northwest Natural Holding Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple stories you create about a company that link your view of its future revenue, earnings and margins to a financial forecast, a fair value, and then a clear comparison with today’s price. All of this is available within an easy tool on Simply Wall St’s Community page that updates automatically when new news or earnings land. You can see, for example, one Northwest Natural Holding Narrative that leans into Texas meter growth, renewable natural gas projects, water utilities and a US$56.33 fair value. You can also see another, more cautious Narrative that focuses on decarbonization policies, regulatory risk and execution uncertainty, giving you two different fair values and two different signals on whether the current share price looks attractive or stretched.
Do you think there's more to the story for Northwest Natural Holding? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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