PNY Investment Analysis Report & Stock Research, Piedmont Natural Gas Company, Inc.

Ockham's Rating/Recommendation Summary

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PNY Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at PNY through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 1.36x and 0.96x respectively.

Utilizing this range we can see that PNY’s current Price to Sales per share ratio of 1.20x is somewhat above its historical average. As such, the current Price to Sales ratio suggests a neutral share price forecast. In order for us to become more positive about PNY we would need to see a drop in the Price to Sales ratio of 3% given current sales per share levels in order to return to its historical weighted average.

PNY Cash Earnings

Looking at PNY specifically in their Cash Earnings capabilities, Ockham views PNY as below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for PNY, the current level of Cash Earnings compared to its historical levels helps identify where PNY is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 11.80 and a historical low Cash Earnings per share ratio of 8.39, an investor can relate where value becomes optimal.

At its current price of $27.30, the Price to Cash Earnings ratio of 8.69 per share for PNY is relatively attractive. At current profitability levels, a drop in share price would only improve our future expectations. Again, Cash Earnings is an incredibly valuable metric, and management at PNY must continue on its generation to improve our overall outlook for the stock.

PNY Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for PNY to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for PNY is $1.12 producing a current dividend yield of 4.10%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from PNY against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from PNY over previous years was 5.74% while the lowest dividend yield was 2.92%. PNY is not making us feel all that confident when their current dividend yield is below the historical median by 5.31%.