In an energy landscape increasingly shaped by the dual forces of decarbonization and demand resilience, National Fuel Gas (NFG) stands out as a rare hybrid: a utility-like dividend payer with the operational grit of an energy infrastructure play. The company’s third-quarter FY2025 results, coupled with its strategic investments in midstream expansion and a decades-long track record of dividend growth, make it a compelling case for income-focused investors and energy sector bulls alike.

Q3 FY2025: A Quarter of Outperformance and Operational Resilience

NFG’s Q3 FY2025 earnings report, released on July 30, 2025, underscored its ability to navigate a volatile energy market. The company delivered adjusted earnings per share (EPS) of $1.64, surpassing the consensus estimate of $1.50 by 9.3%. This marked a dramatic turnaround from a net loss of $0.59 per share in the same period the prior year. Revenue rose 27.4% year-over-year to $531.83 million, though it fell short of the $596.12 million Wall Street target.

The standout performer was the Exploration and Production (E&P) segment, which contributed $0.95 per share in adjusted operating results—a 157% increase year-over-year. This growth was driven by lower per-unit operating costs, higher realized natural gas prices, and robust well performance in the Eastern Development Area (EDA), where production hit 112 Bcf—a 16% increase from the prior year.

Meanwhile, the Pipeline and Storage segment made critical progress on two transformative projects: the Shippingport Lateral Project, which is expected to add 190,000 Dth/day of takeaway capacity, and the Tioga Pathway Project, which received Federal Energy Regulatory Commission (FERC) approval in summer 2025. These projects are not just about incremental capacity; they represent a strategic pivot to lock in long-term cash flows from Appalachian basin gas, a region where NFG has deep operational expertise.

Dividend Consistency: A 50-Year Legacy of Growth

For income-focused investors, NFG’s dividend story is as compelling as its operational results. The company has increased its dividend for over 50 consecutive years, a testament to its financial discipline and commitment to shareholder returns. In 2025 alone, NFG raised its quarterly payout from 51.5 cents per share in March to 53.5 cents in June, with the next payment of 53.5 cents scheduled for October 15, 2025.

The current dividend yield of 2.4% (as of June 30, 2025) may appear modest compared to the 5.2% peak seen in late 2024, but it reflects a conservative payout ratio of 31.02% based on trailing earnings. This low ratio ensures that NFG can sustain and grow its dividend even in a downturn. With a Zacks Rank of #3 (Hold) and a share price up 44.7% year-to-date, the stock offers a balance of income and growth potential.

Strategic Projects: Building a Midstream Powerhouse

The Tioga Pathway and Shippingport Lateral projects are more than just infrastructure upgrades—they are catalysts for long-term value creation. The Tioga Pathway, with its 19.5 miles of new pipeline and modernized Line Z20, is expected to add 190 MMcf/d of transportation capacity by late 2026. This project, combined with the Shippingport Lateral, will enhance NFG’s ability to monetize Appalachian gas, a region where it has drilled over 1,000 wells since 2010.

While these projects won’t directly boost midstream revenue in FY2025, they are critical for FY2026 and beyond. NFG’s guidance for FY2026 includes a 20% increase in adjusted EPS, assuming a NYMEX price of $4.00 per million British thermal units (MMBtu). The company’s midstream capital expenditures are projected to rise to $210–250 million in FY2026, up from $140–180 million in FY2025, reflecting its aggressive expansion plans.

The Investment Case: Balancing Income and Growth

NFG’s appeal lies in its ability to combine the stability of a utility with the growth potential of an energy infrastructure play. For income investors, the 2.4% yield and 50-year dividend growth streak provide a reliable income stream. For energy bulls, the company’s strategic projects and E&P performance offer exposure to the long-term tailwinds of natural gas demand, particularly in a world where LNG exports and industrial consumption remain robust.

However, risks remain. Natural gas prices are volatile, and midstream projects require significant upfront capital. That said, NFG’s conservative payout ratio, strong cash flow generation ($196 million in net operating cash flow in Q3 FY2025), and a clear line of sight to regulatory approvals (e.g., Tioga Pathway’s FERC clearance) mitigate these risks.

Conclusion: A Dividend Play with Infrastructure Momentum

National Fuel Gas is not a flashy stock, but it is a masterclass in disciplined capital allocation and shareholder-centric strategy. Its Q3 FY2025 results, dividend consistency, and strategic midstream projects position it as a high-yield energy play with durable cash flow potential. For investors seeking a balance of income and growth in the energy sector, NFG offers a compelling, well-structured opportunity—one that leverages the strengths of natural gas and infrastructure to deliver long-term value.