We recently published a list of 15 Dividend Zombies to Invest in. In this article, we are going to take a look at where National Fuel Gas Company (NYSE:NFG) stands against other dividend zombies to invest in.
The broader market has posted consecutive annual gains of 25%, largely fueled by growth stocks and companies capitalizing on the rising demand for artificial intelligence. Despite this, dividend stocks remain a key part of a strong investment strategy. Over time, dividends play an increasingly significant role in returns, and historical data shows that from 1987 through the end of 2023, reinvested dividends accounted for roughly 55% of the market’s total gains.
While recent market gains have largely been driven by a few non-dividend-paying companies, the landscape is evolving. Several major tech firms introduced dividend policies last year, emphasizing their commitment to returning capital to shareholders. They view dividends as a valuable complement to share buybacks. Although initial dividend yields from tech stocks remain modest, the total payout is substantial, with just three companies expected to distribute an estimated $17 billion over the next year, as reported by J.P. Morgan.
This shift sends a significant signal to the market. The report highlighted that the best opportunities in dividend stocks come from “Compounders”—companies with a strong history of consistently increasing dividends. Nearly half of the strategy focuses on these firms, which are supported by steady earnings growth. Compounders not only ensure reliable income but also provide a solid foundation for generating long-term portfolio outperformance.
Dividend zombies are a lesser-known category within dividend investing. These companies have consistently paid dividends to shareholders for 100 years or more. Some have even increased their payouts over time, earning a place among the elite dividend aristocrats. Their ability to sustain such a long track record is largely due to strong cash flows and solid financial health. This strong financial position makes these stocks appealing to investors.
According to a report by Nuveen, dividend growth stocks have historically delivered a strong mix of earnings expansion, cash flow stability, and well-managed dividend policies. They have demonstrated solid performance in rising markets while also offering resilience during downturns and periods of market volatility. Over time, companies that consistently increase or initiate dividends have outperformed those that merely maintain payouts, do not pay dividends, or reduce them. In addition, they have achieved these returns with lower risk, as reflected in their lower standard deviation.
Dividend stocks are also appealing today from a valuation perspective. The market’s heavy concentration in a few stocks and the excitement around AI have led to historically low relative valuations for dividend-paying companies. This creates an opportunity for investors to tap into a long-term trend that combines income generation with growth by investing in businesses with solid fundamentals and a track record of steady dividend increases. Historically, this segment has provided downside protection, making it a strategic option for adding stability and diversification to an equity portfolio.
Our Methodology
For this list, we selected companies that have paid dividends for over 100 years and also have strong dividend growth histories. Some of these companies are dividend kings, which means that they have raised their payouts for 50 years or more. The stocks are ranked in ascending order of the consecutive years of dividend payments.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
National Fuel Gas Company (NFG): Among Dividend Zombies to Invest in
A large oil and gas production plant with pipelines leading to tanker truck and storage tanks.
National Fuel Gas Company (NYSE:NFG) ranks thirteenth on our list of the dividend zombies to invest in. The American diversified energy company engages in the exploration and development of natural gas and oil reserves. The company’s exploration and production division accounts for roughly half of its total earnings, while the gathering, storage, and utility segments make up the remaining portion. NFG has been steadily increasing its production and anticipates achieving low-to-mid single-digit growth in output over the next three years. The stock is delivering solid returns, surging by over 27% since the start of 2025.
In fiscal Q1 2025, National Fuel Gas Company (NYSE:NFG) reported revenue of $549.4 million, which saw a 4.59% growth from the same period last year. Net income for the Pipeline & Storage segment rose by $8.4 million (35%) year-over-year, largely due to the settlement of the Supply Corporation rate case, which resulted in higher rates taking effect on February 1, 2024. The Utility segment saw a $5.9 million (22%) increase in net income compared to the previous year, driven by a three-year rate settlement in the company’s New York jurisdiction.
As a result of higher projected natural gas prices and improving conditions across all segments, National Fuel Gas Company (NYSE:NFG) has raised its fiscal 2025 adjusted earnings per share (EPS) guidance to a range of $6.50 to $7.00. In addition, the company’s cash position came in strong as it generated over $220 million in operating cash flow during the quarter. It has been growing its payouts for 54 consecutive years and has paid uninterrupted dividends for 121 years. The company’s quarterly dividend comes in at $0.515 per share and has a dividend yield of 2.64%, as recorded on March 23.
Overall, NFG ranks 13th on our list of dividend zombies to invest in. While we acknowledge the potential of NFG as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than NFG but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
