ONE Gas Updates Investors With Near & Long-Term Guidance
Zacks Investment Research | Jan 16, 2018 09:22PM ET
ONE Gas, Inc. (NYSE:OGS) revised 2017 guidance upwards and issued 2018 financial guidance. Further, the company has also made an announcement regarding its five-year growth forecast.
2017 Guidance Update
The natural gas service provider has increased 2017 net income guidance in the range of $3.06-$3.10 per diluted share, from its previous guidance of $2.94-$3.04.
2018 Highlights
ONE Gas expects 2018 net income to be in the range of $156-$168 million, or $2.96-$3.20 per diluted share. The 2018 earnings guidance reflects benefits from new rates and normal weather conditions in the company’s service territories. Further, it reflects 4 cents per diluted share contribution from the share-based compensation accounting standard, adopted in the first quarter of 2017.
The company anticipates achieving a 7.35% return on equity in 2018, which assumes an average rate base of $3.4 billion. The company envisions capital expenditures to be $375 million in 2018.
5-Year Guidance Update
ONE Gas expects net income and earnings per share to increase by an average 5-7% annually between 2017 and 2022. The company’s rate base is expected to grow an average of 6.0-6.5% per year between 2017 and 2022.
The company anticipates capital expenditures to be in the range of $375-$415 million per year between 2018 and 2022, up from the previous five-year capital expenditures guidance range of $350-$380 million per year between 2017 and 2021.
ONE Gas, a 100% regulated natural gas utility, is expected to benefit from capital investments to strengthen infrastructure. It anticipates to recoup expenses through rate hikes.
Dividend Growth Guidance
ONE Gas’ board of directors raised quarterly dividend by 4 cents per share to 46 cents per share, effective for the first quarter 2018. This will result in an annualized dividend of $1.84 per share, reflecting an annual increase of 9.5%.
Over the long term, it expects average annual dividend growth rate to be 7-9% between 2017 and 2022, with a target dividend payout ratio of 55-65% of net income, subject to approval of board of directors.
Price Movement
In the last one year, shares of ONE Gas have gained 9.8%, compared with the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.