NW Natural vs Southwest Gas
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KIRA’s take AI analyst
I put NW Natural and Southwest Gas side by side, using each one’s latest annual report. Here is what stands out:
- Southwest Gas is the larger business, with $1.9B of revenue in fiscal 2025 against $1.3B for NW Natural, about 1.5 times as much.
- NW Natural grew revenue faster (11.8%, against −21.6%).
- Southwest Gas kept more of each dollar of sales as operating profit (24.4% operating margin, against 21.8%).
- Southwest Gas turned more of its sales into free cash flow (−13.0% FCF margin, against −15.3%).
- NW Natural earned a higher return on the capital invested in it (5.7%, against 4.7%).
- Investors pay more for each dollar of NW Natural’s earnings: a P/E of 16.5x against 12.2x for Southwest Gas.
Who comes out ahead
Of the 10 measures where higher (or lower) is clearly better, how many each company leads.
NW Natural
NWN
3/10
Revenue growth5-year growthReturn on capital
Southwest Gas
SWX
7/10
Operating marginNet marginFCF marginReturn on equityPiotroski F-scoreNet debt / EBITDAShare count change
Side by side
Best in the row
| Latest fiscal year | NWN FY25 | SWX FY25 |
|---|---|---|
| Size | ||
| Market cap | $2.1B | $6.7B |
| Revenue | $1.3B | $1.9B |
| Free cash flow | −$198M | −$252M |
| Net income | $113M | $440M |
| Growth | ||
| Revenue growth | 11.8% | −21.6% |
| 5-year growth | 10.8% | −10.1% |
| Share count change | 5.4% | 0.4% |
| Profitability | ||
| Gross margin | — | — |
| Operating margin | 21.8% | 24.4% |
| Net margin | 8.8% | 22.7% |
| FCF margin | −15.3% | −13.0% |
| Return on capital | 5.7% | 4.7% |
| Return on equity | 7.9% | 11.8% |
| Balance sheet | ||
| Net debt | $2.6B | $2.9B |
| Net debt / EBITDA | 5.8x | 3.6x |
| Dividends and buybacks | $77.3M | $179M |
| Valuation & quality | ||
| P/E | 16.5x | 12.2x |
| Piotroski F-score | 5 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.