BISMARCK, N.D. - MDU Resources Group, Inc. (NYSE: MDU) today unveiled the expected board of directors for Everus Construction Group following its planned spinoff into an independent company. The announcement marks a significant step in the process of establishing Everus as a separate entity, with the spinoff aimed to be finalized by late 2024.
The future board is set to include seven members, with six serving as independent directors. Dale S. Rosenthal, with previous roles at Clark Construction Group and Washington Gas Light Company, is slated to chair the new board. Joining him are Michael S. Della Rocca, Edward A. Ryan, and David M. Sparby, all of whom are transitioning from MDU Resources' board.
Newcomers to the board include Clark A. Wood, soon-to-be-retired market president for US Bank in Arizona and Nevada, Betty R. Wynn, former senior executive at MYR Group (NASDAQ:MYRG), Inc., and Jeffrey S. Thiede, currently serving as president and CEO of Everus.
Dennis W. Johnson, the chair of MDU Resources, emphasized that the formation of Everus' board is a key step towards the company's strategic goal of becoming a pure-play regulated energy delivery business. The move is designed to enhance shareholder value and streamline MDU Resources' focus.
Rosenthal expressed confidence in the appointed board's ability to offer strategic direction to Everus, citing the directors' extensive experience in the construction industry.
The spinoff, initially announced in November 2023, is contingent upon customary conditions, including approval from MDU Resources' board and an effective SEC registration statement. The separation is intended to be tax-free for federal income tax purposes for both MDU Resources and its shareholders.
The information in this release includes forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from projected outcomes.
MDU Resources, founded in 1924 and a member of the S&P MidCap 400 index, operates in regulated energy delivery and construction services. Everus Construction Group provides a broad range of construction services across the United States. This announcement is based on a press release statement.
In other recent news, MDU Resources Group Inc. has made significant strides in its strategic focus. The company reported robust second-quarter earnings of $60.4 million, with record earnings from its pipeline segment and Construction Services business, Everus, at $17.3 million and $39 million respectively. However, the utility business experienced a decrease in earnings from $13.1 million to $10.5 million, primarily due to lower volumes and increased operational maintenance expenses.
MDU Resources also announced a 4% increase in its common stock dividend to 13 cents per share, aligning with its long-term payout ratio goal of 60% to 70% of regulated energy delivery earnings. The company has expanded its board with the appointment of Michael S. Della Rocca and Marian M. Durkin, both of whom bring a wealth of experience from the engineering, construction, and legal sectors.
In a significant development, MDU Resources revealed plans for a tax-free spin-off of Everus later this year, marking a shift towards a pure-play regulated energy delivery business. The company forecasts a 7% compound annual growth rate on the utility rate base and plans for $2.7 billion in regulated capital investments. The final decision to retain an equity stake in Everus post-spin-off is yet to be made. These are recent developments that highlight the company's strategic focus and commitment to its core operations.
InvestingPro Insights
As MDU Resources Group (NYSE: MDU) prepares for the spinoff of Everus Construction Group, investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, MDU Resources currently holds a market capitalization of $5.14 billion, with a Price/Earnings (P/E) ratio of 12.69, indicating the company's earnings relative to its share price. The adjusted P/E ratio for the last twelve months as of Q2 2024 is slightly higher at 13.93, reflecting market expectations for the company's future profitability.
The company's revenue for the last twelve months as of Q2 2024 was reported at $4.397 billion, with a noted decrease of 9.26% in revenue growth during the same period. Despite this, MDU Resources has maintained a gross profit margin of 19.4%, showcasing its ability to control costs and sustain profitability.
InvestingPro Tips reveal that MDU Resources has a track record of stability, trading with low price volatility and maintaining dividend payments for 54 consecutive years—a testament to its financial resilience and commitment to shareholder returns. Moreover, analysts predict the company will remain profitable this year, with the company having been profitable over the last twelve months. There are additional InvestingPro Tips available that provide further insights into MDU Resources' financial and operational performance, accessible through the InvestingPro platform.
As the company moves toward its strategic goal of becoming a pure-play regulated energy delivery business, these financial metrics and expert analyses will be crucial for investors assessing the potential impacts of the Everus spinoff and the future direction of MDU Resources.
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