Reasons to Add Southwest Gas Stock to Your Portfolio Right Now

Southwest Gas Holdings, Inc. SWX has embarked on a strategic transformation to position the company for sustained growth and stability. Its ongoing pipeline infrastructure upgrades and focus on accretive acquisitions are expected to strengthen operating performance. Meanwhile, improving economic conditions in its service areas are offering supportive momentum.

Let us focus on the reasons that make this Zacks Rank #2 (Buy) stock a strong investment pick in the Zacks Utility- Gas Distribution industry at present.

SWX’s Growth Outlook & Surprise History

The Zacks Consensus Estimate for 2025 earnings per share (EPS) is pegged at $3.63, which implies year-over-year growth of 14.87%. 

The Zacks Consensus Estimate for 2025 revenues is pegged at $3.37 billion, which suggests a year-over-year decline of 34.05%.

SWX’s long-term (three to five years) earnings growth rate is 13.33%. 

Its earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 4.05%.

SWX’s Dividend History

Southwest Gas has been increasing shareholder value by steadily paying dividends. Currently, the company’s quarterly dividend is 62 cents per share, resulting in an annualized dividend of $2.48. SWX’s current dividend yield is 3.07%, better than the Zacks S&P 500 composite's average of 1.08%.

SWX’s Capital Investment Plan

Southwest Gas outlined a 2025 capital expenditure plan of $880 million to support customer growth, system improvements and pipe replacement programs.

The company further projected a long-term capital investment plan of $4.3 billion for the period of 2025-2029. Of the total investment, nearly 50% is allocated to safety and pipeline management, while around 30% is targeted toward new business. This will help the company effectively serve its growing customer base and add new revenue streams.

SWX’s Debt to Capital Ratio

Currently, SWX’s total debt to capital is 47.17%, which is slightly better than the industry’s average of 47.91%. This implies that the company is using lower debts to run operations than its peers in the industry.

SWX’s Stock Price Performance

SWX’s shares have risen 14.1% year to date, which beat the industry’s growth of 13.7%.

Other Stocks to Consider

A few other top-ranked stocks from the same sector are Atmos Energy Corporation ATO, PG&E Corporation PCG and Entergy Corporation ETR, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ATO’s long-term earnings growth rate is 7.98%. The Zacks Consensus Estimate for fiscal 2026 EPS is pegged at $8.02, which suggests year-over-year growth of 7.51%.

PCG’s long-term earnings growth rate is 15.89%. The Zacks Consensus Estimate for 2025 EPS is pegged at $1.50, which suggests year-over-year growth of 10.29%.

ETR’s long-term earnings growth rate is 10.21%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.90, which suggests year-over-year growth of 6.85%.

 

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This article originally published on Zacks Investment Research (zacks.com).

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