Natural gas is an important part of the energy sector of the global economy, and is used for everything from heating during the winter, to cooking, to fleets of buses in large cities.
As time goes on, natural gas is seen by many as a potential alternative to oil-based transportation fuel. If natural gas cars catch on, owning natural gas companies is a fantastic long-term investment.
Note that this is a list of potentially good investments — not actual stock picking. Deciding which natural gas companies are worth investing in will require you to do more research than just reading this article. Still, here’s an introduction to the stocks:
List of the Best Natural Gas Dividend Stocks
1. Atmos Energy Corporation. 4.60%
Atmos was founded as Energas in 1983, and has grown to be the largest natural gas distribution company in the United States, primarily by purchases and aquisitions of smaller natural gas utility companies.
Note that Atmos Energy delivers natural gas through piping — it doesn’t actually drill for natural gas.
Atmos Energy Corporation has consisitently increased its dividends every year since 1987. This is a good sign of future dividend performance.
2. Piedmont Natural Gas. 4.20%
Piedmont has increased it’s annual dividend every single year for over 30 years — since 1978. It’s similar to Atmos Energy in the sense that it’s a utility and distribution company — not a drilling company.
3. WGL Holdings 4.10%
Similar to the other natural gas distribution stocks listed above, WGL Holdings doesn’t actually drill for gas, but distributes and sells it to consumers and businesses.
The region WGL Holdings focuses on is in Eastern United States — in and around the District of Columbia, Maryland, Virginia, and Delaware. True to form, WGL has also raised its dividend for decades — every year since 1976.
4. BONUS: Chesapeake Energy
Not all natural gas companies focus on distribution, utility, and delivery of natural gas. Some companies, like Chesapeake Energy, also explore and drill for natural gas. Though Chesapeake’s dividends are considerably lower than the natural gas companies listed above, it’s a growth stock — meaning it’s putting its earnings toward purchasing more natural gas rights to more and more land.
Chesapeake Energy is also getting more and more investors, with Asian sovereign funds putting billions into the company in the last few months. Considering the company is down with the recession right now, I’ve put it on my portfolio.
I’m bullish on natural gas as a lot of larger busing, transportation, garbage, and corporate fleets are turning toward natural gas as a cheaper, greener alternative to dirty oil based fuels. As time goes on, I think the natural gas demand will only increase. It only makes sense to base one’s energy dividend portfolio in part on natural gas.
Shaun Connell owns shares of Chesapeake Energy. Learn Dividends has a disclosure policy.
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