Current Report: MDU Resources

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MDU Resources Group Inc, known by the ticker symbol MDU, is a mid-cap conglomerate company, operating in the industrials business sector. This is my second report on MDU Resources Group Inc for this Viital portfolio. I previously discussed it on March 15.

MDU Resources Group Inc operates in five business segments:  (1) Electric segment, which generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming. (2)The natural gas distribution segment distributes natural gas in those states, as well as in Idaho, Minnesota, Oregon and Washington. (3) The pipeline segment provides natural gas transportation and underground storage services through a regulated pipeline system primarily in the Rocky Mountain and northern Great Plains regions of the United States.  (4)The construction materials and contracting segment mines, processes and sells construction aggregates (crushed stone, sand, and gravel); produces and sells asphalt mix, and supplies ready-mixed concrete. Then, finally, (5) The construction services segment which serves manufacturing, commercial, industrial, transportation, institutional, and renewable and government customers, as well as utilities.

The company was founded in 1924 and is headquartered in Bismarck, North Dakota.

Three key data points gauge any dividend equity or fund such as MDU Resources Group Inc (MDU)

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

MDU Price

MDU’s price per share was $26.04 as of yesterday's market close. One year ago its price was $34.07. Therefore, MDU’s share price fell $8.03 or about 23.5% in the past year.

If MDU’s stock trades in the range of $24.00 to $36.00 this next year, its recent $26.04 share price might rise by $7.96 to reach $34.00 by May 6, 2023. My $7.96 upside estimate is $1.00 less than the median of price upsides gauged by four analysts tracking MDU for their brokerages.

MDU Dividends

MDU’s most recently declared quarterly dividend of $0.2175 was paid April 1st to shareholders on record as of March 9th.

MDU initiated its quarterly dividend  October 1,1982. The dividend has grown steadily from $0.06 to $0.2175 first paid January 1, 2022. At its recent .0.2175 Q rate, MDUs annual payout of $0.87 is estimated to deliver a 3.34% annual yield per yesterday’s $26.04 share price.

MDU Returns

Adding the $0.87 MDU annual dividend to the estimated one-year price upside of $7.96 shows a $8.83 potential gross gain, per share, to be reduced by any costs to trade MDU shares.

At yesterday's $26.04 closing price per share, a little under $1000 would buy 38 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.26 per share.

Subtract that maybe $0.26 brokerage cost from my estimated $8.83 gross gain estimate per share results in a net gain of $8.57 X 38 shares = $325.66 for a 32.6% net gain on a $989.52 investment.

So it is that MDU Resources Group Inc (MDU) shows a possible 32.6% net gain including a 3.34% forward looking dividend yield.

Over the next year at this time our $1000 investment in MDU shares could generate $33.40 in cash dividends alone. Note that a single share of MDU stock bought at yesterday's $26.04 price is over 1.25 times lower than the anticipated dividend income from our $1000.00 invested.

So, by my dogcatcher ideal, this is a good time to buy MDU shares based on their declared dividends for the year 2022. The forthcoming annual dividend from $1K invested is currently 1.25 times more than yesterday's single share price. Consider yourself alerted. It's a sign.

All of the estimates above are speculation based on the past history of MDU Resources Group Inc (MDU). Only time and money invested in this stock will determine its market value.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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