- Wondering if Northwest Natural Holding at US$52.83 is priced attractively or already reflects most of its potential? This article walks through the numbers so you can judge the valuation for yourself.
- The stock has returned 2.7% over the last 7 days, 5.7% over 30 days, 13.0% year to date and 29.6% over 1 year, with 3-year and 5-year returns of 27.9% and 23.9% respectively. These returns naturally raise questions about what is now baked into the price.
- Recent coverage has focused on how gas utilities are being assessed on long term infrastructure needs and regulatory clarity. This helps frame why a stock like Northwest Natural Holding may see steady interest at different times. This broader context matters when you think about whether recent returns reflect shifting risk perceptions or simply changing expectations for the sector.
- On Simply Wall St's valuation checks, Northwest Natural Holding currently records a value score of 0 out of 6. The rest of this article will unpack what that means across different valuation methods and then finish with a broader way to think about what the current price might be telling you.
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 what a stock might be worth by projecting its future dividends and growing them at an estimated long term rate, then discounting those payments back to today.
For Northwest Natural Holding, the model uses a current annual dividend per share of about $2.06 and a return on equity of 7.36%. With a payout ratio of roughly 72.73%, the implied growth rate for dividends is 2.01%. This is calculated as the retained earnings (about 27.27% of profits) multiplied by ROE. That 2.01% rate is then applied to future dividend projections.
On this basis, the DDM output is an estimated intrinsic value of around $41.51 per share. Compared with the current share price of $52.83, this implies the stock is about 27.3% above the model’s estimate of fair value. This suggests a meaningful premium to what the dividend stream alone would justify.
Result: OVERVALUED
Our Dividend Discount Model (DDM) analysis suggests Northwest Natural Holding may be overvalued by 27.3%. Discover 60 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Northwest Natural Holding Price vs Earnings
P/E is a common way to look at valuation for companies that are generating profits, because it directly links what you pay for each share to the earnings that each share produces. Higher growth expectations or lower perceived risk often go hand in hand with a higher “normal” P/E, while slower expected growth or higher risk usually line up with a lower one.
Northwest Natural Holding is trading on a P/E of 19.38x. That is above the Gas Utilities industry average of about 14.87x and also above the peer average of 17.84x. On the surface, that points to a richer valuation than many peers in the same space.
Simply Wall St’s Fair Ratio for Northwest Natural Holding is 18.79x. This is a proprietary estimate of what the P/E might be given factors such as the company’s earnings profile, industry, profit margin, market cap and risk characteristics. It can be more tailored than a simple comparison with industry or peer averages, because it tries to reflect the company’s own mix of growth, risk and profitability. With the current P/E only slightly above the Fair Ratio, the valuation looks close to what that framework would suggest.
Result: ABOUT RIGHT
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Upgrade Your Decision Making: Choose your Northwest Natural Holding Narrative
Earlier the numbers showed where the P/E sits, but Narratives give you a way to add your own story to those numbers by linking your view of Northwest Natural Holding's future revenue, earnings and margins to a forecast and a fair value. You can then compare that fair value with the current price on Simply Wall St's Community page, where millions of investors share different Narratives that all update automatically when new news or earnings arrive. For example, one investor might lean on the analyst consensus fair value of about US$56.33 and a higher US$58 target as support for a more optimistic Narrative. Another might focus on policy and decarbonization risks to build a more cautious Narrative with a lower fair value. You can see both side by side to decide which story fits your view.
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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