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4 Reasons to Add MDU Resources (MDU) to Your Portfolio
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MDU Resources Group’s (MDU - Free Report) two-platform business model, strategic acquisitions, planned investments in electric and natural gas utility projects, along with rising backlog in the construction materials and services business will continue boosting its performance.
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $2.05 and $2.10, respectively. Estimates for 2021 have increased 5.1% in the past 60 days.
Long-term (three to five years) earnings growth is currently pegged at 5%.
Return on Equity & Dividend Yield
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds to generate returns. At present, its ROE is 13.20%, higher than the industry average of 9.77%. The company’s better ROE than the industry indicates that it is using funds more efficiently than peers in the same space.
Currently, the company has a dividend yield of 2.92%, higher than the Zacks S&P 500 Composite’s 1.4%.
Regular Investments & Steady Customer Growth
MDU Resources makes consistent investments to upgrade and maintain the existing infrastructure, as well as expand operations. The company anticipates investing $826 million in 2021 and $3,048 million during the 2021-2025 period. These investments will increase the reliability of services and enable it to serve an increasing customer base effectively. The company expects to see rate base growth over the next five years at a rate of 5%.
During the 2021-2025 period, it expects to invest $631 million and $973 million in electric and natural gas distribution businesses, respectively. Also, the company is likely to witness 1-2% customer growth in these segments annually. Steady increase in the customer base is likely to boost demand and drive its performance in the long run, as vaccines for COVID-19 are being rolled out and economic activities are gradually getting back to normal levels.
Price Performance
In the past six months, the stock has gained 19.9% compared with the industry’s growth of 8.2%.
Other Stocks to Consider
Other top-ranked stocks in the same sector include NewJersey Resource Corporation (NJR - Free Report) , California Water Services Group (CWT - Free Report) and South Jersey Industries Inc. , each currently having a Zacks Rank #2.
NewJersey Resource, California Water Services and South Jersey Industries pay regular dividends, ensuring a steady income for investors. The current dividend yield of NewJersey Resource, California Water Services and South Jersey Industries is 3.38%, 1.71%, and 4.68%, respectively.
The Zacks Consensus Estimate for 2021 earnings for California Water Services and South Jersey Industries has moved up 81.7% and 1.8%, respectively, in the past 60 days. In the same time frame, fiscal 2022 earnings estimates for NewJersey Resource have moved up 8.7%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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4 Reasons to Add MDU Resources (MDU) to Your Portfolio
MDU Resources Group’s (MDU - Free Report) two-platform business model, strategic acquisitions, planned investments in electric and natural gas utility projects, along with rising backlog in the construction materials and services business will continue boosting its performance.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projections & Long-Term Earnings Growth
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $2.05 and $2.10, respectively. Estimates for 2021 have increased 5.1% in the past 60 days.
Long-term (three to five years) earnings growth is currently pegged at 5%.
Return on Equity & Dividend Yield
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds to generate returns. At present, its ROE is 13.20%, higher than the industry average of 9.77%. The company’s better ROE than the industry indicates that it is using funds more efficiently than peers in the same space.
Currently, the company has a dividend yield of 2.92%, higher than the Zacks S&P 500 Composite’s 1.4%.
Regular Investments & Steady Customer Growth
MDU Resources makes consistent investments to upgrade and maintain the existing infrastructure, as well as expand operations. The company anticipates investing $826 million in 2021 and $3,048 million during the 2021-2025 period. These investments will increase the reliability of services and enable it to serve an increasing customer base effectively. The company expects to see rate base growth over the next five years at a rate of 5%.
During the 2021-2025 period, it expects to invest $631 million and $973 million in electric and natural gas distribution businesses, respectively. Also, the company is likely to witness 1-2% customer growth in these segments annually. Steady increase in the customer base is likely to boost demand and drive its performance in the long run, as vaccines for COVID-19 are being rolled out and economic activities are gradually getting back to normal levels.
Price Performance
In the past six months, the stock has gained 19.9% compared with the industry’s growth of 8.2%.
Other Stocks to Consider
Other top-ranked stocks in the same sector include NewJersey Resource Corporation (NJR - Free Report) , California Water Services Group (CWT - Free Report) and South Jersey Industries Inc. , each currently having a Zacks Rank #2.
NewJersey Resource, California Water Services and South Jersey Industries pay regular dividends, ensuring a steady income for investors. The current dividend yield of NewJersey Resource, California Water Services and South Jersey Industries is 3.38%, 1.71%, and 4.68%, respectively.
The Zacks Consensus Estimate for 2021 earnings for California Water Services and South Jersey Industries has moved up 81.7% and 1.8%, respectively, in the past 60 days. In the same time frame, fiscal 2022 earnings estimates for NewJersey Resource have moved up 8.7%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>