71 Years Of Consecutive Dividend Growth Flying Under The Radar

A long track record of dividend growth is important for many dividend investors.

It shows a commitment to keep making payments to its investors, even in difficult times.

Northwest Natural Holding Co. (ticker: NWN) has an amazing record of raising its dividend.

Northwest Natural Holding is the holding company for Northwest Natural Gas Utility, Northwest Natural Water Utility, and SiEnergy Gas Utility.

Over 90% of the company’s operations relate to natural gas, so you can think of Northwest as a natural gas utility.

We’ll get back to its holding company structure in a minute, but first, let’s jump into its dividend.

Northwest just raised its dividend payment to $0.50 every quarter.

The increase marks the 71st straight year Northwest has raised its dividend.

Oil shocks, recessions, financial crashes, pandemics, natural disasters… none of these slows down Northwest and its dividend.

To get the higher payment, you must own shares in Northwest by October 29 (Thursday).

Only two other companies have longer dividend growth streaks: American States Water (ticker: AWR) and Dover Corporation (ticker: DOV).

However, American States Water only has Northwest beat by a year, and Dover has it beat by just a few months.

Plus, Northwest has the highest dividend yield among the 3, coming in at over 4%.

But very few seem to know about Northwest, even among dividend investors.

There are a few reasons why.

First, Northwest is only worth around $2 billion.

Don’t get me wrong… $2 billion is a lot of money.

But when some companies are in the trillions, a $2 billion utility like Northwest slips through the cracks.

Second, the holding company structure can be confusing, and it scares some investors off.

But how Northwest Natural Holding works is pretty simple.

Back in 2018, Northwest restructured itself into its current holding company form.

The reason has to do with regulations and efficiency.

Utility companies are among the most regulated businesses around.

Specifically, the Oregon Public Utility Commission (Northwest operates in Oregon) sets the rates utilities can charge their customers.

Separating the companies ensures problems in a different segment won’t impact the main natural gas utility business.

And it makes it easier for the company and the regulator to keep these operations separate.

The last reason Northwest doesn’t get more attention is its low dividend growth rate.

While the longevity is amazing, Northwest is raising its payment by 1.5%.

Over the past decade, Northwest has averaged only 0.6% dividend growth each year.

So, if you’re looking for a stock with a long history of dividend growth, then Northwest is a great pick.

But if you want faster dividend growth, there are better options available.

What do Northwest’s finances look like?

Utility stocks are great for stability, so we shouldn’t expect high growth rates.

Over the past 5 years, Northwest has grown its revenue and earnings by 4% and 6.3% each year, respectively.

And compared to other utilities, Northwest is very profitable with a 9.75% profit margin over the past 12 months, which is also an all-time high.

We’re also getting the utility at a great price.

Its price-to-earnings (P/E) ratio of 16x is lower than its historical average and below the utility industry average of 18x.

And there’s no need to worry about the dividend growth stopping.

Northwest’s dividend payout ratio is only 46%, which is below other utility companies and an all-time low for the company.

What dividend stocks do you own with a long history of dividend growth?

Michael Jennings

Dividend Stocks Research