BISMARCK, N.D. - MDU Resources Group, Inc. (NYSE: MDU) has announced a capital investment plan of $3.1 billion for the period from 2025 through 2029, marking a 15% increase over the previous five-year plan. This investment aims to enhance and expand the company's electric, natural gas, and pipeline services.
The company's president and CEO, Nicole Kivisto, stated that the increased investment reflects MDU Resources' dedication to providing safe and reliable services to its customers. The plan includes a 47% rise in investments for the electric and natural gas distribution segments compared to the 2020-2024 period. The focus will be on constructing electric transmission lines, substations, and natural gas delivery infrastructure to cater to a customer base expected to grow annually by 1%-2%.
In addition to new construction, the plan involves replacing and modernizing existing electric and natural gas utility infrastructure to maintain safety and reliability. The rate base for these segments is projected to grow by 7%-8% annually over the next five years, an increase from the previously forecasted 7%.
Investments in the pipeline business will continue to support customer growth and the completion of ongoing projects. MDU Resources has indicated that due to the expansion of the capital program, equity issuance to support growth is now anticipated in 2026, a year earlier than previously projected. Despite these changes, the company maintains its long-term EPS growth target of 6%-8%.
It should be noted that actual expenditures may vary from the estimates provided due to factors such as changes in load growth, regulatory decisions, or other unforeseen circumstances. The company regularly reviews its capital program and will communicate any necessary modifications.
This announcement is based on a press release statement and should be considered in light of the risks and uncertainties detailed in MDU Resources' filings with the U.S. Securities and Exchange Commission. The company has clarified that it undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.
In other recent news, MDU Resources Group has seen some notable changes and developments. The company reported a decrease in third-quarter earnings to $64.6 million from $74.9 million in the previous year. However, the adjusted income from continuing operations saw an increase, reaching $65.5 million. MDU Resources also revised its full-year earnings guidance for regulated energy delivery upward and reported record earnings in its pipeline business due to increased transportation volumes and service rates.
In terms of governance, the company has appointed Vernon A. Dosch to its board, bringing his extensive experience in the electric utility and broadband industries. MDU Resources also maintained its quarterly dividend payment at 13 cents per share, in line with its objective of a 60% to 70% dividend payout ratio based on regulated energy delivery earnings.
Further, MDU Resources announced plans for a new data center and increased service agreements for existing data centers. The company completed a strategic pipeline acquisition expected to generate $3 million in annual earnings and projects a long-term EPS growth at 6% to 8%. These recent developments reflect the company's focus on organic growth and strategic acquisitions, particularly in the midstream sector.
InvestingPro Insights
MDU Resources Group's ambitious $3.1 billion capital investment plan aligns well with its current financial position and market performance. According to InvestingPro data, the company boasts a market capitalization of $3.92 billion, suggesting that the planned investment represents a significant commitment relative to its size.
The company's P/E ratio of 9.87 indicates that it's trading at a relatively low earnings multiple, which is further supported by an InvestingPro Tip highlighting that MDU is "Trading at a low P/E ratio relative to near-term earnings growth." This valuation metric could be attractive to investors considering the company's growth plans.
Another relevant InvestingPro Tip notes that MDU "Has maintained dividend payments for 54 consecutive years." This impressive track record of consistent dividends, coupled with the current dividend yield of 2.77%, underscores the company's commitment to shareholder returns even as it pursues significant capital investments.
The company's strong recent performance is evident in its price movements, with InvestingPro data showing a 74.18% YTD price total return and an 86.53% 1-year price total return. This positive momentum is reflected in another InvestingPro Tip stating that MDU is "Trading near 52-week high," which aligns with the company's confident outlook and expanded investment plans.
For investors seeking more comprehensive analysis, InvestingPro offers 13 additional tips for MDU Resources Group, providing a deeper understanding of the company's financial health and market position.
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