On Jun 17, Zacks Investment Research upgraded MDU Resources Group Inc. (MDU - Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
MDU Resources has been witnessing rising earnings estimates on the back of strong first-quarter 2016 results. This electric and natural gas utility reported earnings of 17 cents, resulting in a positive earnings surprise of 30.77%, in the first quarter of 2016. The company reported a loss of $1.57 per share in the year ago quarter. The long-term earnings growth is pegged at 7.0%.
The company’s consistent investments in operation and infrastructure have been a tailwind. MDU Resources is currently benefiting from its past investments and has further plans to invest over $1.5 billion in the next five years. This is expected to drive compounded earnings growth of 7% annually over that period.
The company has in the meantime expanded its customer base to 1.5 million. It further aims to grow its customers base by 1.5% to 2% annually.
MDU Resources’ construction business is also sustaining the momentum gathered in 2015. The company exited first-quarter 2016 with a combined construction business (materials $0.83 billion and services $0.53 billion) backlog of nearly $1.36 billion, up 38% year over year.
The current debt–to-capital ratio of the company is 42.2%, lower than the industry average of 45.81%. In addition, MDU Resources’ current ratio of 1.39 makes it an all season utility having the ability to survive with or without a rate hike. The current dividend yield of the company is 3.28%, much better than the utility sector average of 2.97%
The Zacks Consensus Estimate for 2016 moved up 4.7% to $1.12 per share as 50% of the estimates were revised higher over the last 60 days. For 2017, 50% estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 6.4% to $1.33 per share.
Other Stocks on the Horizon
Apart from MDU Resources Group, Clean Energy Fuels Corp. (CLNE - Free Report) , Spark Energy, Inc. and Avangrid, Inc. (AGR - Free Report) sport a Zacks Rank#1 (Strong Buy).
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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On Jun 17, Zacks Investment Research upgraded MDU Resources Group Inc. (MDU - Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
MDU Resources has been witnessing rising earnings estimates on the back of strong first-quarter 2016 results. This electric and natural gas utility reported earnings of 17 cents, resulting in a positive earnings surprise of 30.77%, in the first quarter of 2016. The company reported a loss of $1.57 per share in the year ago quarter. The long-term earnings growth is pegged at 7.0%.
The company’s consistent investments in operation and infrastructure have been a tailwind. MDU Resources is currently benefiting from its past investments and has further plans to invest over $1.5 billion in the next five years. This is expected to drive compounded earnings growth of 7% annually over that period.
The company has in the meantime expanded its customer base to 1.5 million. It further aims to grow its customers base by 1.5% to 2% annually.
MDU Resources’ construction business is also sustaining the momentum gathered in 2015. The company exited first-quarter 2016 with a combined construction business (materials $0.83 billion and services $0.53 billion) backlog of nearly $1.36 billion, up 38% year over year.
The current debt–to-capital ratio of the company is 42.2%, lower than the industry average of 45.81%. In addition, MDU Resources’ current ratio of 1.39 makes it an all season utility having the ability to survive with or without a rate hike. The current dividend yield of the company is 3.28%, much better than the utility sector average of 2.97%
The Zacks Consensus Estimate for 2016 moved up 4.7% to $1.12 per share as 50% of the estimates were revised higher over the last 60 days. For 2017, 50% estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 6.4% to $1.33 per share.
Other Stocks on the Horizon
Apart from MDU Resources Group, Clean Energy Fuels Corp. (CLNE - Free Report) , Spark Energy, Inc. and Avangrid, Inc. (AGR - Free Report) sport a Zacks Rank#1 (Strong Buy).
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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