National Fuel Gas Company (NYSE:NFG) Financial Performance Analysis

• NFG's ROIC of 0.86% is significantly lower than its WACC of 6.40%, indicating inefficiency in generating sufficient returns to cover its cost of capital.
• Comparatively, peers like NWN and BKH show more effective capital utilization with higher ROIC to WACC ratios.
• New Jersey Resources Corporation (NJR) leads in efficiency among NFG's peers with a ROIC of 5.45% and a WACC of 5.67%, showcasing superior capital utilization.

National Fuel Gas Company (NYSE:NFG) is a diversified energy company engaged in the exploration, production, and distribution of natural gas. It operates across both upstream and midstream sectors, offering a comprehensive approach to energy management. NFG competes with other energy companies such as Northwest Natural Holding Company, Black Hills Corporation, New Jersey Resources Corporation, UGI Corporation, and Atmos Energy Corporation.

In evaluating NFG's financial performance, the Return on Invested Capital (ROIC) is a critical metric. NFG's ROIC is 0.86%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 6.40%. This indicates that NFG is not generating sufficient returns to cover its cost of capital, which is a concern for investors looking for efficient capital use.

Comparatively, Northwest Natural Holding Company (NWN) has a ROIC of 2.39% and a WACC of 5.04%, resulting in a ROIC to WACC ratio of 0.47. This suggests NWN is more effective than NFG in generating returns relative to its cost of capital. Similarly, Black Hills Corporation (BKH) shows a ROIC of 4.81% against a WACC of 5.50%, with a ratio of 0.87, further highlighting NFG's inefficiency.

New Jersey Resources Corporation (NJR) leads among NFG's peers with a ROIC of 5.45% and a WACC of 5.67%, achieving a ROIC to WACC ratio of 0.96. This indicates NJR's superior ability to generate returns over its cost of capital, making it the most efficient in capital utilization among the group.