Northwest Natural Holding Co Stock Shows Every Sign Of Being Modestly Undervalued
- By GF Value
The stock of Northwest Natural Holding Co (NYSE:NWN, 30-year Financials) is believed to be modestly undervalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $53.95 per share and the market cap of $1.7 billion, Northwest Natural Holding Co stock appears to be modestly undervalued. GF Value for Northwest Natural Holding Co is shown in the chart below.
Because Northwest Natural Holding Co is relatively undervalued, the long-term return of its stock is likely to be higher than its business growth, which is estimated to grow 6.18% annually over the next three to five years.
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Since investing in companies with low financial strength could result in permanent capital loss, investors must carefully review a company's financial strength before deciding whether to buy shares. Looking at the cash-to-debt ratio and interest coverage can give a good initial perspective on the company's financial strength. Northwest Natural Holding Co has a cash-to-debt ratio of 0.02, which ranks worse than 89% of the companies in the industry of Utilities - Regulated. Based on this, GuruFocus ranks Northwest Natural Holding Co's financial strength as 3 out of 10, suggesting poor balance sheet. This is the debt and cash of Northwest Natural Holding Co over the past years:
It is less risky to invest in profitable companies, especially those with consistent profitability over long term. A company with high profit margins is usually a safer investment than those with low profit margins. Northwest Natural Holding Co has been profitable 9 over the past 10 years. Over the past twelve months, the company had a revenue of $773.7 million and earnings of $2.51 a share. Its operating margin is 19.17%, which ranks in the middle range of the companies in the industry of Utilities - Regulated. Overall, the profitability of Northwest Natural Holding Co is ranked 6 out of 10, which indicates fair profitability. This is the revenue and net income of Northwest Natural Holding Co over the past years: