MDU Resources Group, Inc. (MDU) | Investment Case

1. Company Snapshot

1.a. Company Description

MDU Resources Group, Inc.engages in the regulated energy delivery, and construction materials and services businesses in the United States.The company's Electric segment generates, transmits, and distributes electricity for residential, commercial, industrial, and municipal customers in Montana, North Dakota, South Dakota, and Wyoming, as well as operates 3,500 miles of transmission lines and 4,800 miles of distribution lines.

Its Natural Gas Distribution segment distributes natural gas for residential, commercial, and industrial customers in Idaho, Minnesota, Montana, North Dakota, Oregon, South Dakota, Washington, and Wyoming; and offers supply-related value-added services.The company's Pipeline segment provides natural gas transportation and underground storage services through a regulated pipeline system primarily in the Rocky Mountain and northern Great Plains regions; and cathodic protection and other energy-related services.Its Construction Materials and Contracting segment mines, processes, and sells construction aggregates; produces and sells asphalt mix; and supplies ready-mixed concrete.

This segment is also involved in the sale of cement, finished concrete products, and other building materials and related contracting services.The company's Construction Services segment designs, constructs, and maintains electrical and communication wiring and infrastructure, fire suppression systems, mechanical piping and services; overhead and underground electrical, gas, and communication infrastructure; and manufactures and distributes transmission lines construction equipment.It serves manufacturing, commercial, industrial, transportation, institutional, and renewable and government customers, as well as utilities.

The company was founded in 1924 and is headquartered in Bismarck, North Dakota.

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1.b. Last Insights on MDU

MDU Resources Group, Inc.'s recent performance was negatively impacted by its Q2 earnings lag, with profit plunging despite a revenue uptick. The company's narrowed full-year EPS guidance to $0.88-$0.95 per share also raised concerns. Although the pipeline segment showed solid performance, driven by higher transportation revenue, and the electric utility and natural gas distribution customer base achieved a 1.4% year-over-year growth rate, these positives were overshadowed by the earnings miss. The company's refocus on its core utility business post-spin-off of Everus Construction Group may be a strategic move.

1.c. Company Highlights

Last Price	20.23
Change Percentage	-0.10%
Open	20.33
Previous Close	20.25
Market Cap ( Millions)	4135
Volume	882159
Year High	21.49
Year Low	15.04
M A 50	20.1
M A 200	18.31

FCF Yield	-7.71%
Dividend Yield	2.67%
ROE	6.94%
Debt / Equity	0.00%
Net Debt / EBIDTA	-0.04%
Price To Book	1.49
Price Earnings Ratio	21.71
Price To FCF	-12.98
Price To sales	2.21
EV / EBITDA	7.96

2. MDU Resources Group's Earnings Reflect Steady Progress in Utility and Energy Infrastructure

MDU Resources Group reported earnings of $190.4 million, or $0.93 per share, for the year-end 2025, within the earnings per share guidance range. The actual EPS was slightly above the estimates, and revenues are expected to grow at 5.7% next year. Jason Vollmer, CFO, highlighted that the company's strong balance sheet allows it to finance operations through peak seasons. The company's reported EPS is $0.93, which is a decline from $1.37 per share in 2024.

Publication Date: Feb -06

                                    📋 Highlights
                                    2025 Earnings Performance:
                                                Generated $190.4 million in earnings ($0.93 per share), aligning with guidance despite a 32% year-over-year decline from 2024's $281.1 million ($1.37 per share).
Capital Deployment:
                                                Invested $792 million in 2025, driving a 16% year-over-year growth in utility rate base and advancing projects like the Badger Wind Farm (49% ownership).
Regulatory & Project Filings:
                                                Filed for recovery of Badger Wind Farm costs in three states and revised its 2026–2030 capital investment plan to $3.1 billion.
Data Center Load Growth:
                                                Secured 580 megawatts of electric service agreements, with 180 MW operational since May 2023, signaling expansion potential.
Bakken East Pipeline Progress:
                                                Launched a binding open season set to close March 13, 2026, with final investment decision pending customer interest evaluation.

                                

Capital Investments and Regulatory Progress

The company deployed $792 million in capital, advancing key projects, including the acquisition and placement in service of its 49% ownership interest in Badger Wind Farm. This project, along with other capital investments, resulted in a 16% year-over-year growth in utility rate base. The company revised its 2026 through 2030 capital investment plan to $3.1 billion, indicating a significant commitment to growth projects.

Growth Opportunities in Data Centers and Energy Infrastructure

Nicole Kivisto mentioned that the company has 580 megawatts of load under signed electric service agreements with data center customers, with 180 megawatts online since May 2023. The company is pursuing additional discussions with potential data center customers and is considering investing capital into new generation, transmission, and related assets to serve the increased load. The Bakken East pipeline project is also advancing, with a binding open season that closed on March 13, and a final investment decision expected after the open season.

Valuation and Outlook

With a P/E Ratio of 21.64 and an EV/EBITDA of 12.94, the company's valuation reflects a premium for its growth prospects. The company's ROE is 6.94%, indicating a relatively stable return on equity. The initiated earnings per share guidance for 2026 is in the range of $0.93 to $1 per share, reflecting continued strong performance across its segments. The long-term EPS growth rate is expected to be between 6% to 8%, driven by the company's commitment to operating with integrity and a focus on safety.

3. NewsRoom

Clear Creek Financial Management LLC Acquires Shares of 27,346 MDU Resources Group, Inc. $MDU

Feb -22

Source: defenseworld.net

MDU Resources Group, Inc. (NYSE:MDU) Receives $21.00 Average PT from Analysts

Feb -20

Source: defenseworld.net

MDU Resources Announces Quarterly Dividend on Common Stock

Feb -19

Source: prnewswire.com

Harbor SMID Cap Value ETF Q4 2025 Performance Review

Feb -10

Source: seekingalpha.com

MDU Resources Group Q4 Earnings Call Highlights

Feb -08

Source: defenseworld.net

Near-Term Outlook For MDU Resources Is Good, Not Great

Feb -08

Source: seekingalpha.com

MDU Resources Group, Inc. (MDU) Q4 2025 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

MDU Resources Q4 Earnings Meet Estimates, Revenues Decline Y/Y

Feb -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.91%)

6. Segments

Construction Services

Expected Growth: 3.5%

MDU Resources Group's Construction Services segment growth of 3.5% is driven by increasing demand for infrastructure development, government investments in transportation and energy projects, and a strong backlog of projects. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to its growth.

Natural Gas Distribution

Expected Growth: 1.8%

MDU Resources Group's Natural Gas Distribution segment growth of 1.8% is driven by increasing customer base, favorable weather conditions, and infrastructure investments. Additionally, rate base growth, expansion of service territories, and cost savings initiatives contribute to the segment's growth.

Electric

Expected Growth: 2.5%

MDU Resources Group's Electric segment growth of 2.5% is driven by increasing demand for electricity in its service territories, investments in grid modernization and infrastructure upgrades, and a focus on renewable energy sources. Additionally, the company's efforts to improve operational efficiency and customer growth also contribute to this growth rate.

Pipeline

Expected Growth: 2.2%

MDU Resources Group's pipeline growth is driven by increasing demand for natural gas infrastructure, strategic acquisitions, and expansion into high-growth regions. Additionally, the company's focus on safety, reliability, and customer satisfaction has led to increased customer loyalty and retention, further contributing to its 2.2% growth.

7. Detailed Products

Construction Services

MDU Resources Group, Inc. provides construction services through its subsidiary, MDU Construction Services Group, Inc. The company offers a range of services including electrical, mechanical, and civil construction, as well as transmission and distribution services.

Energy Transportation and Storage

The company's energy transportation and storage segment provides natural gas transportation, storage, and gathering services through its subsidiary, WBI Energy, Inc.

Electric and Gas Distribution

MDU Resources Group, Inc. provides electric and gas distribution services through its subsidiary, Montana-Dakota Utilities Co. The company distributes electricity and natural gas to residential, commercial, and industrial customers.

Pipeline and Midstream

The company's pipeline and midstream segment provides oil and natural gas gathering, processing, and transportation services through its subsidiary, WBI Energy, Inc.

Refining and Marketing

MDU Resources Group, Inc. provides refining and marketing services through its subsidiary, Dakota Prairie Refining, LLC. The company refines crude oil into various petroleum products.

8. MDU Resources Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MDU Resources Group, Inc. operates in the energy and construction materials industries, which have relatively low substitutability. While there are some substitutes for energy and construction materials, they are not easily replaceable, and the company's products and services have a moderate level of uniqueness.

Bargaining Power Of Customers

MDU Resources Group, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often essential to its customers, giving it an upper hand in negotiations.

Bargaining Power Of Suppliers

MDU Resources Group, Inc. has a moderate level of dependence on its suppliers, particularly for raw materials and equipment. While the company has some bargaining power due to its size and scale, suppliers also have some leverage due to the specialized nature of their products.

Threat Of New Entrants

The energy and construction materials industries have high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise. This makes it difficult for new entrants to enter the market and compete with established players like MDU Resources Group, Inc.

Intensity Of Rivalry

The energy and construction materials industries are highly competitive, with many established players competing for market share. MDU Resources Group, Inc. faces intense competition from rivals, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	46.96%
Debt Cost	5.37%
Equity Weight	53.04%
Equity Cost	7.38%
WACC	6.44%
Leverage	88.54%

11. Quality Control: MDU Resources Group, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Mueller Industries

A-Score: 6.4/10

Value: 4.3

Growth: 7.1

Quality: 7.9

Yield: 2.0

Momentum: 9.0

Volatility: 8.0

1-Year Total Return ->

MDU Resources

A-Score: 5.7/10

Value: 5.6

Growth: 2.1

Quality: 4.8

Yield: 6.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

Seaboard

A-Score: 5.6/10

Value: 6.8

Growth: 5.1

Quality: 4.4

Yield: 0.0

Momentum: 10.0

Volatility: 7.3

1-Year Total Return ->

Icahn Enterprises

A-Score: 5.3/10

Value: 7.9

Growth: 4.4

Quality: 2.9

Yield: 10.0

Momentum: 1.5

Volatility: 5.3

1-Year Total Return ->

Valmont

A-Score: 5.3/10

Value: 3.1

Growth: 7.3

Quality: 6.0

Yield: 1.0

Momentum: 7.5

Volatility: 6.7

1-Year Total Return ->

Griffon

A-Score: 4.7/10

Value: 3.1

Growth: 5.9

Quality: 4.3

Yield: 5.0

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

20.42%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.44%

MDU Resources Group, Inc. - US5526901096

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MDU

1.c. Company Highlights

Higher Yield

Less Volatile

Lower Growth

Earnings Beats

Revenues Miss

Stable Momentum

Strong Momentum

Revenues Beats

Medium Volatility

Earnings Miss

Weak Momentum

2. MDU Resources Group's Earnings Reflect Steady Progress in Utility and Energy Infrastructure

Capital Investments and Regulatory Progress

Growth Opportunities in Data Centers and Energy Infrastructure

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.91%)

6. Segments

Construction Services

Expected Growth: 3.5%

Natural Gas Distribution

Expected Growth: 1.8%

Electric

Expected Growth: 2.5%

Pipeline

Expected Growth: 2.2%

7. Detailed Products

Construction Services

Energy Transportation and Storage

Electric and Gas Distribution

Pipeline and Midstream

Refining and Marketing

8. MDU Resources Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: MDU Resources Group, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.23$

Current Price

20.23$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA