Is nwn a buy?
6/16/2024 01:04am
**Northwest Natural (NWN) is not a compelling buy based on the current financial metrics and market sentiment.** Here's why:
1. **Negative EPS and Revenue Growth**: The company has reported a Basic EPS of $1.69, which is lower than expected, and a year-on-year total revenue growth rate of -6.26%, indicating a decline in revenue and profitability.
|Ticker|Name|Total Revenue year-on-year growth rate|P/E(TTM)|Free Cash Flow|Basic EPS|Date|code|market_code|
|---|---|---|---|---|---|---|---|---|
|NWN.N|Northwest Natural|-6.261150505057059||-1.07163985203E8|1.69|20240331|NWN|169|
|NWN.N|Northwest Natural||15.658644|||20240614|NWN|169|
2. **Mixed Analyst Ratings**: Despite being upgraded by StockNews.com to a "hold" rating, there are concerns about the company's financial performance and missed earnings expectations. Additionally, the consensus rating for Northwest Natural is "Hold" with a consensus target price of $41.40, suggesting limited upside potential.
3. **Attractive Dividend Yield**: Northwest Natural offers a dividend yield of 5.2%, which is attractive for income investors. However, this should be evaluated in the context of the company's financial health and growth prospects.
4. **Financial Health Concerns**: The company has reported negative free cash flow of $107.16 million, which is a red flag for financial health and operational sustainability. Additionally, the debt-to-equity ratio of 1.17 suggests a higher level of debt relative to equity.
5. **Market Sentiment**: The stock has experienced a decline in price and has opened at a 12-month low, which could be a concerning sign for investors looking for stable returns.
In conclusion, while Northwest Natural (NWN) offers an attractive dividend yield, the current financial metrics and market sentiment do not strongly support a buy recommendation. Investors should consider these factors and conduct further research before making a decision.