NW Natural vs. Middlesex Water: Which Dividend Is Safer for Retirement?
A Pacific Northwest gas utility expanding into Texas squares off against a New Jersey water company staring down a quarter-billion-dollar cleanup bill, and for retirees living on dividends, picking the wrong one could cost them years of income growth.
Northwest Natural (NYSE:NWN) and Middlesex Water (NASDAQ:MSEX) both reported second-quarter results this summer, and both draw income investors with decades of dividend raises. Northwest Natural is a Pacific Northwest gas utility that is expanding into Texas gas and water. Middlesex is a New Jersey water utility facing an expensive PFAS cleanup. If you are retired, the question is which payout holds up better.
Weather Lifted Middlesex While Rate Cases Carried NW Natural
Middlesex posted diluted EPS of $0.79, beating the $0.70 consensus. Revenue rose 14.3%. CEO Nadine Leslie credited “increased wholesale customer demand and favorable weather.” Weather can also work against the company. Q3 2025 missed estimates because weather hurt demand, so I treat part of this beat as luck.
NW Natural earned $0.01 per share in the quarter. That is normal for a gas utility that makes most of its money in winter. Year-to-date EPS of $2.33 says more, and management now expects 2026 EPS in the top half of its $2.95 to $3.15 range. Washington approved a $20.10 million annual rate increase, and an Oregon settlement for $13 million is set to take effect October 31. Texas provides the growth. SiEnergy grew customers over 15% and has more than 260,000 future meters in its backlog.
| Income Lens | NW Natural | Middlesex |
|---|---|---|
| Forward Annual Dividend | $2.00 | $1.44 |
| Dividend Yield | 3.94% | 2.54% |
| Payout of TTM EPS | About 66% | About 53% |
| Latest Authorized ROE | 9.5% (Washington) | 9.6% (New Jersey) |
| Forward P/E | 15 | 29 |
Middlesex Grows Its Dividend Faster as a PFAS Bill Looms
Middlesex raised its dividend 5.88% in October 2025. Investors pay for that growth: the stock trades at 29 times forward earnings and sits 41.79% below its price five years ago. The bigger concern is roughly $255 million for PFAS treatment at its Edison plant. That sits inside a $506 million plan for 2026 through 2028 at a company worth about $1.06 billion. To pay for it, expect more rate filings and possibly new shares.
NW Natural’s latest raise, to $0.50 from $0.4925 per quarter, was a slim 1.52%. CFO Raymond Kaszuba said the payout ratio is coming “in line with our 55% to 65% target.” Cash fell to $24.2 million from $102.6 million, though liquidity was near $628 million. Expect ATM share sales of $40 million to $50 million this year, which will dilute existing holders a little.
Oregon’s Order and MX3 Will Set the Pace
I will be watching the Oregon order. I will also watch whether the $300 million MX3 storage project, signed at a 12.5% ROE, gets Notice to Proceed by the end of 2027. That approval would raise NW Natural’s long-term EPS growth target to 5%-7%. For Middlesex, keep an eye on its usual late-October dividend declaration.
Why NW Natural Holds the Income Edge
On current income, NW Natural has the edge. A 3.94% yield at 15 times forward earnings pays more income today. Its 70-plus-year run also checks out: dividend records show a raise every year since 2005. Signed storage returns and new Texas meters give the payout room to keep growing. Middlesex’s 53-year run, with annual raises on record back to 2004, is impressive. Still, a 2.54% yield, a premium valuation, and a large PFAS bill weigh on its appeal for investors focused on current income.
We put both in the rare company. We ranked ten names with 50-plus years of consecutive valuation raises in a free Dividend Kings report for readers building retirement income.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
