Breaking Down National Fuel Gas Company (NFG) Financial Health: Key Insights for Investors

You're watching National Fuel Gas Company (NFG) because its integrated model is defintely working, and the fiscal year 2025 results prove it. The company just reported full-year adjusted earnings per share (EPS) of $7.10, marking a powerful 38% rise over the prior year, and frankly, that kind of growth in a regulated-yet-diversified energy play is rare. This isn't just a gas price blip; it's operational discipline, with the Upstream and Gathering segment boosting production by 20% while cutting capital spending by 15% since mid-2023. Plus, they're doubling down on regulated assets with the massive $2.62 billion acquisition of CenterPoint Energy's Ohio utility, which is a clear bet on stable rate base expansion. That's a serious commitment to long-term, predictable cash flow. So, the question isn't whether they're financially healthy, but how you position your portfolio around their strategic growth into 2026, especially with new projects like the Shippingport Lateral expected to add $15 million in annual revenue.

Revenue Analysis

You need to know where National Fuel Gas Company (NFG)'s money is actually coming from, because the consolidated revenue figures often hide the underlying business strength. The direct takeaway for fiscal year 2025 is that the company is demonstrating a strong rebound in its upstream (Exploration and Production) segment, which is driving overall growth despite market volatility.

For the twelve months ending June 30, 2025, National Fuel Gas Company's trailing twelve-month (TTM) revenue stood at approximately $2.18 billion. This is a significant improvement, with the cumulative revenue for the first nine months of fiscal 2025 reaching $1,811.26 million, marking a year-over-year increase of 15.17% compared to the same period in 2024. That's a solid double-digit growth rate, showing the integrated business model is working.

The company's revenue streams are cleanly divided into four core business segments. By looking at the first nine months of fiscal 2025, we can map out exactly which parts of the business are contributing the most to the top line. Here's the quick math on the $1,811.2 million in cumulative revenue:

• Exploration and Production (E&P): $864.7 million
• Utility: $729.4 million
• Pipeline and Storage: $207.9 million
• Gathering: $9.2 million

The Utility and E&P segments are the clear revenue pillars, but the growth stories are different. The E&P segment, which focuses on natural gas production, is the largest single source of revenue for the company.

To be fair, the contribution of different business segments to overall revenue shows a balanced, though not equal, split between the regulated and non-regulated sides of the business. This is the integrated model at work, blending the stability of a utility with the upside of production.

Looking at significant changes, the Exploration and Production segment is the main driver of the positive revenue trend. For the third quarter of fiscal 2025, this segment's adjusted operating results surged by an incredible 157% year-over-year. This jump is due to lower per-unit operating costs and higher realized natural gas prices, plus strong well performance in the Eastern Development Area (EDA). Production volumes were up 16% year-over-year in Q3 2025, reaching 112 Bcf.

Also, the regulated Pipeline and Storage segment is adding new, stable revenue streams. New infrastructure projects like the Shipping Port lateral project are expected to generate approximately $15 million in annual revenue, and the Tioga Pathway project is on track. Together, these two projects are projected to generate north of $30 million of new annual revenue, which is a meaningful boost to that segment. These regulated projects provide a defintely predictable, long-term revenue base that offsets some of the commodity price risk in the E&P business. For a deeper dive into the company's full financial picture, you can check out Breaking Down National Fuel Gas Company (NFG) Financial Health: Key Insights for Investors.

Profitability Metrics

You need to know if National Fuel Gas Company (NFG) is actually making money, not just moving gas around. The short answer is yes, and their profitability metrics for fiscal year 2025 show a significant rebound, putting them well ahead of most of their peers in the integrated energy space.

The key takeaway is that NFG's integrated business model-spanning exploration, pipeline, and utility-drives exceptional gross margin performance, which is a major competitive advantage. Their Net Profit Margin for the fiscal year ended September 30, 2025, stood at a strong 22.74%, a massive increase from the prior year's 4.01%.

Gross, Operating, and Net Margins

When we look at the core profitability figures for NFG's 2025 fiscal year, the numbers are impressive, especially at the top of the income statement. The company's Gross Profit Margin is a clear indicator of its efficient operations and pricing power, particularly within its regulated utility and pipeline segments.

Here's the quick math on the major profitability metrics, using the full-year $2.28 billion in revenue and $518.50 million in net income for FY 2025, and the most recent trailing twelve-month (TTM) data for operating profit:

• Gross Profit Margin: 89.19%.
• Operating Margin: 42.57% (based on TTM Operating Income of $929.25 million and TTM Revenue of $2.183 billion).
• Net Profit Margin: 22.74%.

This kind of gross margin is defintely a testament to their vertically integrated strategy. It's tough to beat an 89.19% gross margin in the energy sector.

Trends and Operational Efficiency

Looking at the trend, NFG's profitability has been volatile, which is normal for a business with a major Exploration and Production (E&P) segment exposed to commodity prices. Still, the 2025 results show a powerful recovery, with Net Income jumping to $518.50 million from $84 million in fiscal 2024. This 568.93% increase in earnings is not just a fluke; it reflects better natural gas prices and operational wins in the regulated segments, like favorable rate settlements for the Pipeline & Storage and Utility segments.

Operational efficiency is clearly visible in the massive gap between the Gross Margin (89.19%) and the Operating Margin (42.57%). This spread shows that while the cost of producing the gas is low (high Gross Margin), the company has significant operational expenses, like depreciation and amortization, and maintenance costs, which is typical for a capital-intensive pipeline and utility business. The cost management efforts are paying off, though, as the adjusted operating results increased by 14% in the first quarter of 2025.

Outperforming the Industry

You should know that NFG's profitability ratios are not just good; they are elite. The company's Gross Profit Margin of 89.19% and its Net Profit Margin of 22.74% are both ranked in the top 10% of its industry sector. This is a massive performance gap compared to the broader, often more volatile, Oil & Gas Production sector, which saw average net margins fluctuate wildly, for example, from 4.7% to 31.3% in 2021 alone. NFG's integrated model provides a buffer, allowing the regulated utility and pipeline segments to generate stable, high-margin revenue that offsets some of the E&P segment's commodity price risk. For a deeper look into the investor base driving this performance, you can check out Exploring National Fuel Gas Company (NFG) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You want to know if National Fuel Gas Company (NFG) is leaning too heavily on debt to fuel its growth. The quick answer is that their financing mix is currently balanced, sitting right in line with industry norms, but a major acquisition is about to shift that balance temporarily.

As of the end of fiscal year 2025, National Fuel Gas Company has a total debt load of approximately $2.8 billion, balanced against total shareholder equity of roughly $3.1 billion. This gives the company a Debt-to-Equity (D/E) ratio of about 0.92. A D/E ratio is a simple measure of financial leverage: it tells you how much debt the company uses for every dollar of shareholder equity.

Here's the quick math on why that 0.92 D/E is a realist's comfort zone:

• The D/E ratio of 0.92 means NFG uses 92 cents of debt for every dollar of equity.
• This compares favorably to the average for the Oil and Gas Midstream segment-a close peer given NFG's pipeline and gathering businesses-which typically runs around 0.97.
• NFG is a capital-intensive utility, so this level of debt is defintely expected and manageable.

The company maintains a strong investment-grade credit rating, which is crucial for managing this debt. In October 2025, S&P Global Ratings affirmed an issuer credit rating of 'BBB-' for National Fuel Gas Company's unsecured notes, with a Stable Outlook. This rating signals that the company's current financial health is solid enough to meet its debt obligations, even with its long-term debt being substantial.

Near-Term Financing and Leverage Shift

National Fuel Gas Company's balance between debt and equity is about to get a stress test from a strategic move. The company announced the acquisition of CenterPoint Energy's Ohio natural gas utility business for $2.62 billion. To finance this, they are issuing a combination of common equity and significant unsecured debt, including a $1.2 billion promissory note.

This is a clear example of how NFG balances funding-using both debt and equity-to execute its strategy of increasing its regulated, stable utility earnings. But you need to watch the immediate impact. What this estimate hides is the temporary weakening of credit metrics. S&P expects the Funds From Operations (FFO) to debt ratio to drop to 30%-35% in fiscal 2027, down from an expected 40% in fiscal 2025. That's a temporary dip in debt-servicing capacity, but it's a calculated risk.

The company's strategy is to let the new regulated assets generate stable cash flow to quickly improve those metrics back toward 40% FFO to debt by fiscal 2028. This is a textbook utility growth play: take on debt for a stable, rate-regulated asset, then pay it down with the asset's predictable cash flow. You can read more about the overall picture in Breaking Down National Fuel Gas Company (NFG) Financial Health: Key Insights for Investors.

Finance: Monitor the D/E ratio closely through 2026, especially as the $1.2 billion in new debt is issued.

Liquidity and Solvency

You're looking at National Fuel Gas Company (NFG) to understand its ability to meet near-term obligations, and the quick takeaway is that while the traditional liquidity ratios look tight, the company's regulated business model provides a crucial, stabilizing cash flow anchor. This is a classic utility profile; don't panic over a low current ratio, but understand what drives it.

Assessing National Fuel Gas Company (NFG)'s Liquidity

National Fuel Gas Company's liquidity position, measured by the Current Ratio (Current Assets / Current Liabilities), is characteristic of a capital-intensive utility. For fiscal year 2025, the Current Ratio sits around 0.46, and the Quick Ratio (a stricter test that removes inventory) is even lower at about 0.39.

A ratio below 1.0 means the company's current assets-cash, receivables, etc.-do not cover its current liabilities-payables, short-term debt-which is a red flag for most industries. But for a utility like National Fuel Gas Company, with predictable, regulated cash flows, this is defintely common. They can operate with negative working capital because their revenue stream is steady and reliable.

• Current Ratio: 0.46 (Current Assets / Current Liabilities)
• Quick Ratio: 0.39 (Stricter measure, excludes inventory)

Working Capital Trends and Analysis

The low current ratio translates directly into a negative working capital position. Based on the latest available data, with current liabilities around $1.10 billion (as of June 30, 2025), the working capital is structurally negative. This trend reflects the company's business model: they collect cash quickly from customers (low receivables) but hold substantial, long-term assets (pipelines, utility infrastructure) that aren't counted as current assets.

The core risk here isn't day-to-day solvency, but rather an unexpected surge in short-term debt or a sudden cash drain. What this estimate hides, however, is the non-current nature of their core assets and the stability of their revenue, which is why we must look at cash flow.

Cash Flow Statements Overview

Cash flow is the true measure of National Fuel Gas Company's financial health, and here the picture is strong. For the nine months ended June 30, 2025, Net Cash Provided by Operating Activities (CFOA) was a robust $862.3 million. This is the cash generated from the core business and it's the engine that funds everything else.

The company is a heavy investor in its future. Net Cash Used in Investing Activities (CFIA) for the same period was $618.0 million, primarily driven by capital expenditures (CAPEX) like pipeline expansion projects. The difference between these two-Operating Cash Flow minus CAPEX-is the free cash flow, which is positive and anticipated to be between $300 million and $350 million for the full fiscal year 2026.

Liquidity Concerns and Strengths

The primary strength is the regulated nature of the Utility and Pipeline & Storage segments, which provide predictable cash flows that support the dividend and capital spending. This stability is what allows them to manage the negative working capital. The company's management defines free cash flow as net cash provided by operating activities, less net cash used in investing activities, adjusted for acquisitions and divestitures.

The main concern is the heavy reliance on external financing for large growth projects, like the recently announced acquisition of CenterPoint Energy's Ohio natural gas utility for $2.62 billion. While CFFA includes routine items like the $2.14 per share dividend, major acquisitions or high capital expenditures will require new debt or equity, which is typical for a growth-focused utility. To understand the investor landscape better, you should check out Exploring National Fuel Gas Company (NFG) Investor Profile: Who's Buying and Why?

Next step: Portfolio Manager: Model a stress test on the debt-to-EBITDA ratio if the CenterPoint acquisition financing is 100% debt.

Valuation Analysis

You're looking at National Fuel Gas Company (NFG) and wondering if the market is giving you a fair shake on the price. The direct takeaway is that, based on traditional multiples, NFG appears reasonably valued compared to its sector, but deep-dive models suggest it could be significantly undervalued.

The stock has had a great run in 2025, up an impressive 30.5% year-to-date, which is a big move for a diversified utility and energy company. Still, its current price of around $81.33 is well below its 52-week high of $94.13, but a good distance above the 52-week low of $59.01. The question is whether that momentum has more room to run.

Is National Fuel Gas Company Overvalued or Undervalued?

To gauge the valuation, we look at the core multiples. For the 2025 fiscal year, National Fuel Gas Company's valuation metrics suggest a company priced for steady, if not spectacular, growth. Here's the quick math on the key ratios:

• Price-to-Earnings (P/E) Ratio: The forward P/E is about 10.04x, which is quite attractive for a utility-like business, suggesting earnings are cheap relative to the share price. The trailing twelve months (TTM) P/E is higher at 14.18x.
• Price-to-Book (P/B) Ratio: The P/B ratio stands at approximately 2.40x based on June 2025 book value per share. This is a premium to book value, which is typical for a stable, growing utility with regulated assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which accounts for debt, is a solid 7.16x. For an integrated energy player, this is a healthy, not overheated, figure.

To be fair, a Discounted Cash Flow (DCF) analysis, which is what I defintely prefer for long-term value, suggests a massive disconnect. One recent model calculates an intrinsic value of $252.36 per share, implying the stock is undervalued by a staggering 68.3%. This kind of gap usually signals that the market is either missing a major growth catalyst or heavily discounting future cash flow risks. You need to dig into the Mission Statement, Vision, & Core Values of National Fuel Gas Company (NFG) to see if management's long-term plan supports that intrinsic value.

Dividend Strength and Analyst Sentiment

The dividend profile is strong, which is what you want from a utility. National Fuel Gas Company offers an annual dividend of $2.14 per share, translating to a current yield of around 2.66%. Crucially, the payout ratio is a sustainable 36.34%. This low payout ratio means the company has plenty of room to reinvest in its regulated business segments and continue its long streak of dividend increases.

Wall Street analysts are leaning positive, but not unanimously bullish. The consensus rating is a 'Moderate Buy', with an average 12-month price target of $98.00.

The consensus target of $98.00 suggests an upside of over 20% from the current price, aligning more with the 'undervalued' perspective than the simple multiples might imply. Your next step should be to model out the impact of their recent acquisitions and regulated rate case settlements on the next two years of free cash flow to see if you can justify that $98.00 target yourself.

Risk Factors

You're looking at National Fuel Gas Company (NFG), and while the fiscal 2025 results show strong growth-adjusted earnings per share (EPS) hit $6.91, a 38% increase year-over-year-you can't ignore the clear, near-term risks. The company's integrated model is a strength, but it also means regulatory and commodity shocks can hit multiple segments at once. We need to map the external pressures and the internal operational challenges, especially around compliance.

The biggest external risk is the classic upstream problem: commodity price volatility. Even though NFG is vertically integrated, its Exploration and Production (E&P) segment is still subject to the market. The company does a good job mitigating this; they have already hedged approximately 65% of their expected natural gas production for fiscal 2026. Still, if natural gas prices drop significantly below the current forward curve, it will pressure the unregulated business margins.

The regulatory and environmental landscape is defintely the most acute risk right now. On October 30, 2025, the Commonwealth of Pennsylvania filed criminal charges against NFG, alleging 100 violations of state environmental laws related to fracking-wastewater spills. This is a material event that goes beyond a simple fine; it raises serious questions about environmental compliance oversight and could lead to significant financial penalties, legal costs, and operational restrictions. This is a clear and present danger to shareholder value.

Beyond the environmental charges, NFG faces two other critical strategic and financial risks:

• Integration Risk: The planned acquisition of CenterPoint Energy's Ohio utility business for $2.62 billion is a massive strategic move, expected to double the regulated rate base. But, as with any large transaction, integrating the operations, technology, and culture of this new asset carries execution risk.
• Interest Rate & Debt Risk: As a capital-intensive utility, NFG is sensitive to interest rate changes. While the balance sheet is managed well-the Net Debt/Adjusted EBITDA ratio is projected to improve to a healthy 2.0x to 2.1x in fiscal 2025-a prolonged period of high interest rates increases the cost of capital for future modernization and expansion projects.

Here's the quick math on how NFG is trying to manage its financial risk profile:

The company's mitigation centers on its integrated structure and capital discipline. The regulated segments, like the Pipeline & Storage and Utility divisions, provide a stable, predictable earnings base that acts as a buffer against E&P volatility. For a deeper dive into the company's long-term direction, you should review their Mission Statement, Vision, & Core Values of National Fuel Gas Company (NFG).

Growth Opportunities

You're looking at National Fuel Gas Company (NFG) and wondering if the recent stock surge has any legs, and honestly, the financial data from the 2025 fiscal year suggests the growth story is far from over. The company's integrated business model is its biggest competitive advantage, acting like a self-funding machine that connects its own gas production to its regulated pipelines and utility customers. This structure gives them a stability most pure-play energy companies just don't have.

In fiscal year 2025, National Fuel Gas Company delivered an annual revenue of approximately $2.28 billion and reported a significant jump in earnings to $518.50 million. The adjusted earnings per share (EPS) guidance was narrowed to a range of $6.80 to $6.95 per share, which represents a massive increase from the prior year. That's a clear signal of operational strength, not just a lucky commodity price spike.

Strategic Drivers and Production Gains

The core of National Fuel Gas Company's near-term growth is its upstream Exploration and Production segment, Seneca Resources, which hit a record net production of 427 Bcfe in fiscal 2025. This meaningful growth was achieved with capital expenditures of only $605 million, reflecting a 30% improvement in capital efficiency since fiscal 2023. They're getting more gas for less money. Plain and simple.

The focus is on the richer Eastern Development Area (EDA), where new wells are delivering more than twice the productivity of older areas. Plus, the company has added 220 Upper Utica drilling sites, which expands their well inventory to nearly 20 years. That's a long runway for production growth.

• Improve capital efficiency by 30% since FY23.
• Expand well inventory to nearly 20 years with new Upper Utica sites.
• Target over 10% adjusted EPS growth from FY24 through FY27.

Infrastructure Expansion and Earnings Outlook

The midstream Pipeline and Storage segment is also a major growth engine, providing stable, regulated revenue. Two new pipeline projects, the Tioga Pathway and the Shippingport Lateral, are key strategic initiatives that will generate substantial revenue. For example, an amendment to the Tioga Pathway is expected to add 40 BCF of throughput and approximately $15 million in revenue over the next five years.

Looking ahead, National Fuel Gas Company is projecting adjusted EPS for fiscal 2026 in the range of $8.00 to $8.50 per share, which is about a 20% increase from the 2025 guidance midpoint. Here's the quick math on their divisions driving this: the regulated segments are expected to see an 8% to 10% growth rate due to rate settlements in New York and Pennsylvania, while the unregulated segments benefit from the operational efficiencies mentioned earlier.

What this estimate hides is the potential for a higher profit range if natural gas prices exceed current assumptions. The company is also moving toward closing its Ohio gas utility acquisition in the fourth quarter of calendar 2026, which will further expand its regulated footprint and diversify its asset base. This is defintely a long-term play for stability.

For a deeper dive into who is betting on this growth, you should check out Exploring National Fuel Gas Company (NFG) Investor Profile: Who's Buying and Why?