- Record Gas Deliveries & Customer Growth: Fiscal 2025 saw record gas deliveries, with 5 main miles installed (50% higher than 2024) and 700+ new services connected.
- Net Income & EPS Growth: Net income rose to $13.3M ($1.29/share) in 2025, up 15% from $11.8M ($1.16/share) in 2024.
- Lower Capital Expenditures: CapEx decreased to $20.7M in 2025, a 6% decline from $22M in 2024, despite infrastructure expansion.
- Rate Case & Tax Credit Refunds: Filed for a $4.3M annual revenue increase and committed to returning tax credits to customers over 12 months.
- Dividend Increase Authorization: Board approved a 5% dividend hike to $0.04/share, reflecting confidence in sustained growth and profitability.
Operational Highlights
The company's operational performance was marked by a significant increase in new services, with over 700 new connections. Residential and commercial volumes were slightly up compared to the same quarter in the prior year. The company's investment in the Mountain Valley Pipeline (MVP) was supported by debt refinancing, extending the maturity to 2032. As the company mentioned, "We're hearing a more precise announcement around Google's intentions may occur in 2026, although no specific date has been set," indicating potential future growth drivers.
Outlook and Guidance
For fiscal 2026, RGC Resources expects continued momentum with new housing growth in the Roanoke Valley and expansion in the healthcare and medical sectors. The company has a capital budget of $22 million and expects customer growth to drive investments. The earnings per share guidance for 2026 is $0.87 per share, with a range due to uncertainty around volume, deliveries, weather, and rate making. Analysts estimate next year's revenue growth at 3.0%.
Valuation and Dividend
With a P/E Ratio of 17.14 and a Dividend Yield of 3.77%, RGC Resources' stock appears to be reasonably valued. The company's ROE stands at 11.56%, indicating a decent return on equity. The Board authorized a $0.04 per share dividend increase, a 5% increase, reflecting the company's confidence in its future prospects. The Net Debt / EBITDA ratio is 4.48, indicating a manageable debt burden.
Rate Case and Tax Credits
RGC Resources filed an expedited rate case on December 2, seeking a $4.3 million increase in annual revenues. The company also recently reached an agreement to return tax credits to customers over the next 12 months. This move is expected to benefit customers and potentially drive further growth.