May 28, 2022

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Financial Analysis: NorthWestern (NWE) and Its Peers

NorthWestern (NASDAQ: NWE) is one of 31 public companies in the “Electric & other services combined” industry, but how does it compare to its rivals? We will compare NorthWestern to similar companies based on the strength of its analyst recommendations, dividends, institutional ownership, profitability, valuation, earnings and risk.

Dividends

NorthWestern pays an annual dividend of $2.40 per share and has a dividend yield of 4.3{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. NorthWestern pays out 70.2{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of its earnings in the form of a dividend. As a group, “Electric & other services combined” companies pay a dividend yield of 3.3{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} and pay out 63.6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of their earnings in the form of a dividend. NorthWestern has increased its dividend for 1 consecutive years.

Institutional & Insider Ownership

94.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of NorthWestern shares are held by institutional investors. Comparatively, 71.6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of shares of all “Electric & other services combined” companies are held by institutional investors. 1.2{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of NorthWestern shares are held by company insiders. Comparatively, 4.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of shares of all “Electric & other services combined” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares NorthWestern and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NorthWestern 12.74{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} 7.89{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} 2.72{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
NorthWestern Competitors 1.59{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} 10.01{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} 2.41{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}

Analyst Recommendations

This is a breakdown of recent ratings and target prices for NorthWestern and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NorthWestern 0 1 0 0 2.00
NorthWestern Competitors 464 1959 1402 14 2.25

NorthWestern presently has a consensus price target of $62.00, indicating a potential upside of 9.93{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. As a group, “Electric & other services combined” companies have a potential upside of 6.20{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. Given NorthWestern’s higher probable upside, equities analysts plainly believe NorthWestern is more favorable than its rivals.

Risk & Volatility

NorthWestern has a beta of 0.3, indicating that its share price is 70{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} less volatile than the S&P 500. Comparatively, NorthWestern’s rivals have a beta of 0.59, indicating that their average share price is 41{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} less volatile than the S&P 500.

Valuation & Earnings

This table compares NorthWestern and its rivals gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
NorthWestern $1.26 billion $202.12 million 16.49
NorthWestern Competitors $8.73 billion $451.22 million 17.51

NorthWestern’s rivals have higher revenue and earnings than NorthWestern. NorthWestern is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

NorthWestern rivals beat NorthWestern on 9 of the 15 factors compared.

NorthWestern Company Profile

NorthWestern Corporation, doing business as NorthWestern Energy, provides electricity and natural gas to residential, commercial, and industrial customers. The company operates through Electric Operations and Natural Gas Operations segments. It generates, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company’s natural gas transmission system covers approximately 4,810 miles of pipeline. It serves approximately 734,800 customers in Montana, South Dakota, and Nebraska, the United States. NorthWestern Corporation was founded in 1923 and is based in Sioux Falls, South Dakota.

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