BISMARCK, N.D. - MDU Resources Group, Inc. (NYSE: MDU) announced a dividend increase on its common stock to 13 cents per share, marking a 4% rise from the previous 12.5 cents per share. This change is part of the company's ongoing shift towards becoming a pure-play regulated energy delivery business.
The board's decision supports a long-term dividend payout ratio goal of 60% to 70% of regulated energy delivery earnings, reflecting MDU Resources' commitment to disciplined investment and stockholder returns. Dennis W. Johnson, the board chair, emphasized the uninterrupted payment of dividends for 86 years as a testament to the company's steady approach to rewarding its shareholders.
The new dividend is scheduled for payment on October 1, 2024, to shareholders on record as of September 12, 2024. This announcement coincides with the company's celebration of its 100th anniversary, underscoring a century-long legacy of providing essential products and services in regulated energy delivery and construction services.
MDU Resources cautioned that forward-looking statements made in the press release, including those about the company's strategic transition and dividend policy, are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially.
The company is a constituent of the S&P MidCap 400 index and has been in operation since 1924. Additional information about MDU Resources and its centennial celebration can be found on its website.
This news is based on a press release statement and reflects the company's latest strategic financial decision, as MDU Resources continues to navigate its long-term business evolution.
In other recent news, MDU Resources Group Inc. reported robust financial results in its 2024 Second Quarter Earnings Conference Call. The company announced earnings of $60.4 million, with the pipeline segment and Everus, the company's Construction Services business, achieving record earnings of $17.3 million and $39 million respectively. However, the utility business saw a decrease in earnings from $13.1 million to $10.5 million, primarily due to lower volumes and higher operational maintenance expenses.
President and CEO Nicole Kivisto detailed the upcoming tax-free spin-off of Everus later this year, emphasizing the company's focus on its regulated energy delivery businesses. The company reaffirmed its regulated energy delivery guidance for 2024, forecasting a 7% compound annual growth rate on the utility rate base. Additionally, MDU Resources plans $2.7 billion in regulated capital investments.
These recent developments come with optimism for future growth in regulated energy delivery projects and the performance of Everus. However, the company is yet to make a final decision on whether to retain an equity stake in Everus post-spin-off. Further details on the Everus spin-off will be provided with the release of a Form 10 with pro forma financial statements later in the year.
InvestingPro Insights
In light of MDU Resources Group's recent dividend increase, a closer look at the company's financial metrics can provide investors with a clearer picture of its current performance. With a market capitalization of $4.95 billion and a Price/Earnings (P/E) ratio of 12.19, MDU appears to be maintaining a stable valuation in the market.
InvestingPro data reveals that MDU has experienced a revenue decline of 9.26% over the last twelve months as of Q2 2024, which aligns with the InvestingPro Tip indicating an expected drop in net income this year. Despite this, the company's commitment to shareholder returns is evident, as it has not only maintained but also increased its dividend payments for 54 consecutive years, a streak that is supported by its recent dividend policy announcement.
Moreover, the company's dividend yield stands at 2.07%, and while the dividend growth has seen a decrease of 43.82% over the last twelve months as of Q2 2024, the consistent dividend payments highlight MDU's focus on providing steady returns to its investors.
InvestingPro Tips also suggest that analysts predict MDU will remain profitable this year, a sentiment supported by the company's positive return on assets of 5.2%, indicating efficient use of its assets to generate earnings. For investors seeking more detailed analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/MDU, offering further insights into MDU Resources Group's financial health and market performance.
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