Northwestern Energy: Doing Better Than The Stock Price Performance Suggests

Core Viewpoint - Northwestern Energy Group, Inc. is a regulated electric and natural gas utility operating in rural areas of the U.S., particularly Montana, South Dakota, and Nebraska, with a focus on stable cash flows and attractive dividend yields amidst recession fears [1][7][14] Company Overview - Northwestern Energy Group serves approximately 470,300 electric and 326,700 natural gas customers, with the majority located in Montana [4][9] - The company operates 25,274 miles of electric transmission and distribution lines and 7,390 miles of natural gas pipelines, indicating a significant infrastructure investment [4] - The customer base has shown growth, particularly in Montana, where the population is increasing at a rate of 1.5% annually [8][9] Financial Performance - The company's operating cash flow for the twelve-month period ending June 30, 2024, was $419.1 million, up from$368.4 million the previous year, indicating growth [8][11] - Net income increased by 19% to $209.2 million for the same period, with diluted earnings per share rising from$2.99 to $3.42, a 14.38$2.5 billion in infrastructure from 2024 to 2028, which is expected to support growth in its rate base and earnings per share at a compound annual growth rate of 4% to 6% [8][11] - The company benefits from demographic trends, with a growing customer base reflecting the population increase in its service areas [8][9] Valuation - The forward price-to-earnings ratio for Northwestern Energy Group is 15.48, which is slightly undervalued compared to its peers, making it an attractive option for potential investors [12][13]