Reasons to Add MDU Resources (MDU) to Your Portfolio Now

Zacks Equity Research

18 June 2024 at 7:54 am·3-min read

MDU Resources Group Inc.’s MDU systematic investments should further improve the reliability of its services. It is expected to benefit from its focus on regulated energy delivery business. Given its growth opportunities, the company makes for a solid investment option in the utility sector.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

Growth Projections

The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased 3.3% to $1.55 in the past 60 days.

The Zacks Consensus Estimate for 2025 EPS is pinned at $1.65, indicating a year-over-year increase of 6.5%.

The company’s long-term (three to five-year) earnings growth rate is 6%.

Return on Equity (ROE)

ROE indicates how efficiently a company has been utilizing the funds to generate returns. Currently, MDU Resources’ ROE is 11.42%, higher than the industry’s average of 9.7%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility gas distribution industry.

Debt Position & Solvency

Currently, MDU’s total debt to capital is 44.46%, better than the industry’s average of 49.52%.

The time-to-interest earned ratio at the end of the first quarter of 2024 was 5.7. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.

Dividend History

Steady earnings generation enables the company to distribute regular dividends to its shareholders. MDU Resources has been paying out dividends for the past 86 years.

Currently, its quarterly dividend is 12.5 cents per share, resulting in an annualized dividend of 50 cents per share. The company targets dividend payout in the range of 60-70%. Its current dividend yield of 2.02% is better than the Zacks S&P 500 composite’s 1.29%.

Systematic Investments

The company expects its capital expenditures to be $2.7 billion in the 2024-2028 period. These investments should further increase the reliability of its services and enable it to effectively serve an increasingly large customer base. MDU’s compound annual growth rate target for the next five years is 6-7%.

Price Performance

In the past three months, shares of MDU have risen 9.9% compared with the industry’s growth of 3.6%.

Image Source: Zacks Investment Research

Other Stocks to Consider

A couple of other top-ranked stocks from the same industry are Atmos Energy ATO, New Jersey Resources NJR and UGI Corporation UGI, each holding 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 (three to five years) earnings growth rate is 7%. The Zacks Consensus Estimate for ATO’s fiscal 2024 EPS indicates year-over-year growth of 10.2%.

The Zacks Consensus Estimate for NJR’s fiscal 2024 EPS indicates a year-over-year improvement of 9.7%. The company delivered an average earnings surprise of 107.4% in the last four quarters.

The Zacks Consensus Estimate for UGI’s fiscal 2024 EPS indicates a year-over-year improvement of 2.8%. The company delivered an average earnings surprise of 19.1% in the last four quarters.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Atmos Energy Corporation (ATO) : Free Stock Analysis Report

UGI Corporation (UGI) : Free Stock Analysis Report

MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report

NewJersey Resources Corporation (NJR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The Smart Investor
Share Prices of These 4 Singapore Stocks Are Hitting Their 52-Week Highs: Can They Continue Their Run?
These four Singapore stocks are seeing their share prices shooting up, but can they continue to do so? The post Share Prices of These 4 Singapore Stocks Are Hitting Their 52-Week Highs: Can They Continue Their Run? appeared first on The Smart Investor.
Insider Monkey
The Wealthiest Person in Singapore
We recently compiled a list of the 30 Wealthiest People in Singapore and in this article, we will look at the richest person in Singapore. An Outlook of the Singaporean Economy According to the Ministry of Trade and Industry (MTI), the Singaporean economy rose at a more rapid pace than expected in Q1 2024. The GDP […]
The Smart Investor
4 Singapore Blue-Chip Stocks Delivering Dividend Yields of 5.6% or More
If you desire a mix of stability and high yield, these four blue-chip stocks should be suitable for your portfolio. The post 4 Singapore Blue-Chip Stocks Delivering Dividend Yields of 5.6% or More appeared first on The Smart Investor.
PC Gamer
Nvidia loses $500 billion in the biggest short term loss in company value in all of recorded history. A year ago that would have killed it yet today it will barely notice
After briefly becoming the world's most valuable company Nvidia has now experienced the biggest three-day loss in value of any company ever.
The Smart Investor
Sheng Siong’s Share Price is Languishing Near its 52-Week Low: Can the Retailer Find its Mojo Again?
The supermarket retailer’s share price has stayed stagnant in recent months. Can Sheng Siong see a recovery on the horizon? The post Sheng Siong’s Share Price is Languishing Near its 52-Week Low: Can the Retailer Find its Mojo Again? appeared first on The Smart Investor.
Simply Wall St.
Unveiling Three SGX Stocks That Might Be Trading Below Their Estimated Fair Value
As the Singapore market continues to evolve, investors are keenly observing trends and shifts that could signal new opportunities. Amidst these developments, identifying stocks that may be trading below their estimated fair value could offer potential for those looking to diversify or optimize their portfolios in current market conditions.
The Smart Investor
iFAST’s Share Price Surged 64% in the Past Year: Can the Fintech Surpass its All-Time High of S$10?
With iFAST’s share price shooting up by 64%, does the fintech have what it takes to reclaim its all-time high of S$10? The post iFAST’s Share Price Surged 64% in the Past Year: Can the Fintech Surpass its All-Time High of S$10? appeared first on The Smart Investor.
Simply Wall St.
Shareholders in SATS (SGX:S58) are in the red if they invested five years ago
SATS Ltd. ( SGX:S58 ) shareholders should be happy to see the share price up 13% in the last quarter. But over the last...
Barrons.com
This Stock Is Beating Nvidia—and It’s Set to Climb Even More
Abercrombie & Fitch’s stock has smoked Nvidia’s in the past year. A strategic makeover under CEO Fran Horowitz is winning fans on Wall Street and Main.
Simply Wall St.
SGX Dividend Stocks Offering Yields From 4.1% To 9.2%
In recent times, the Singapore market has shown resilience amidst global economic challenges, reflecting a robust financial environment that continues to attract investors. Given the current landscape where consumer fraud is on the rise, as evidenced by significant increases in reported losses, dividend stocks could be considered a potentially safer option for those looking to maintain steady income streams from their investments.
Bloomberg
Singapore raises home supply to decade high as market cools
Singapore is moving forward with a plan to release the most private housing supply since 2013 even as interest from developers cools.
USA TODAY
Stock splits make Nvidia and Chipotle shares more affordable. Should you buy them?
Stocks splits from the likes of Nvidia and Chipotle and others make shares more affordable for people to buy. Should you? What to know.
Reuters
Who owns France's debt and why it matters
President Emmanuel Macron's shock snap election has rocked France's bond market, the largest in the euro zone, as a strong showing for the far right and left wing parties in opinion polls exacerbates concerns about fiscal sustainability. Earlier in June, the risk premium France pays for its debt on top of Germany's neared levels last seen in 2012, during the euro zone debt crisis. The question is how much more turmoil the two-round elections on June 30 and July 7 could sow in bond markets.
Benzinga
What's Going On With Broadcom Stock On Tuesday?
Broadcom Inc (NASDAQ:AVGO) recently announced significant updates to its VMware Cloud Foundation (VCF), aiming to enhance digital innovation with faster infrastructure modernization, improved developer productivity, and better cybersecurity at a low total cost of ownership. The latest advancements in VCF support customers’ needs by integrating enterprise-class computing, networking, storage, management, and security across various environments. The new VCF Import functionality allows seamless in
Simply Wall St.
Hour Glass And 2 More SGX Dividend Stocks To Consider
As the global payment landscape evolves with initiatives like the European Payments Initiative, investors may find stability and potential growth in dividend stocks amidst market fluctuations. In Singapore, where financial markets are known for their robustness, dividend stocks such as Hour Glass can offer investors a blend of income and relative security in uncertain times.
Reuters
US dollar's dominance secure, BRICS see no progress on de-dollarization -report
The U.S. dollar remains the world's primary reserve currency, and neither the euro nor the so-called BRICS countries have been able to reduce global reliance on the dollar, a new study by the Atlantic Council's GeoEconomics Center shows. The group's "Dollar Dominance Monitor" said the dollar continued to dominate foreign reserve holdings, trade invoicing, and currency transactions globally and its role as the primary global reserve currency was secure in the near and medium term. Dollar dominance — the outsized role of the U.S. dollar in the world economy — has been strengthened recently given the robust U.S. economy, tighter monetary policy and heightened geopolitical risks, even as economic fragmentation has strengthened a push by BRICS countries to shift into other international and reserve currencies.
Yahoo Finance
Stock market today: Nvidia rebound fuels Nasdaq rally as Dow falls 300 points
Stocks are hoping to add a punchline to what's been a high-flying quarter thus far.
Barrons.com
Bitcoin Price Steadies After Mt. Gox Fall. This Could Get Crypto Rising Again.
Bitcoin and other cryptocurrencies were mixed early Tuesday after a steep selloff the previous day. The market is still digesting the pending refund of assets from the collapsed Mt. Gox crypto exchange. Bitcoin fell sharply from levels of around $64,000 on Monday after news that Mt. Gox’s trustee will begin to return more than $8.5 billion of the crypto owed to creditors from the beginning of July.
GOBankingRates
Dollar-Cost Averaging: Pros, Cons, and When To Use This Investment Strategy
Dollar-cost averaging is when you dedicate a consistent amount of money toward your investments on a regular basis. Find out if this investment strategy is right for you.
Fortune
Departing Nvidia VP salutes Jensen Huang’s leadership, and pinpoints the 3 key principles he taught her
After 7 years of working for Nvidia’s CEO Jensen Huang, the chipmaker's outgoing VP said that her boss taught her about the importance of first principles thinking, zero-billion dollar markets and speed-of-light execution.

Straits Times Index

S&P 500

Dow

Nasdaq

Bitcoin USD

CMC Crypto 200

FTSE 100

Gold

Crude Oil

10-Yr Bond

Nikkei

Hang Seng

FTSE Bursa Malaysia

Jakarta Composite Index

PSE Index