Piedmont Natural Gas CompanyPNY

Morningstar Rating

Stock Research and Analysis

by Travis Miller

We've always liked Piedmont Natural Gas for its simple business model, consistent performance, hearty dividend, and stable market in the Southeast. Although growth is slowing given general economic weakness and lack of access to capital, this company Read more

Bulls Say

You could set your watch by Piedmont's dividend record. The company has paid an annual dividend every year since 1956 and raised it every year since 1978.

A regulated distribution business in attractive Southeast markets directly translates to steady earnings growth.

North Carolina's decoupled rate system allows Piedmont to earn a consistent profit regardless of gas prices and weather fluctuations.

New storage facilities that Piedmont owns will give it greater flexibility in its natural gas purchases throughout the year. Read more

Bears Say

Gas price spikes could lead customers to switch from gas to electricity for heating and cooking in Piedmont's core markets.

Higher interest rates could force the company to divert cash from shareholders to debtholders until regulatory rates catch up.

The company could lose market share in the industrial distribution segment if other gas marketing companies can provide gas or a competing fuel at a cheaper price. Read more

Strategy

With the housing market slowing traditional new customer growth, Piedmont is finding new growth in the conversion market, power generation marketing, and natural gas storage. In particular, management Read more

Management

Piedmont management has a long history of making shareholder-friendly decisions with the company's cash. Most notably, the multidecade string of paying--and increasing--the dividend through several industry cycles shows that executives and directors Read more

Profile

Piedmont Natural Gas distributes natural gas to more than 1 million customers in North Carolina, South Carolina, and the Nashville, Tenn., metropolitan area. The company Read more

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