MDU Resources Boosts Shareholder Value Through 7.7% Dividend Hike

MDU Resources MDU announced that its board of directors has approved a 7.7% increase in its quarterly dividend rate. The new dividend rate will be 14 cents per share (compared with the previous quarter’s 13 cents), payable on Oct. 1, 2025, to stockholders of record at the close of business on Sept. 11, 2025.

This increase resulted in an annualized dividend of 56 cents per share compared with the previous level of 52 cents. The board continues to target a long-term dividend payout ratio of 60-70% of earnings. The company’s current dividend yield is 3.16%, higher than the Zacks S&P 500 composite's average of 1.15%. 

MDU Resources has been paying uninterrupted dividends for the past 87 years. This move demonstrates MDU’s steadfast dedication to provide its investors with reliable, long-term value. More details relating to MDU’s dividend are available here.

Can MDU Resources Continue to Increase Dividends?

MDU Resources is set to gain from its focus on safely meeting customer demand by upgrading and expanding its electric and natural gas infrastructure. MDU Resources expects to achieve long-term earnings per share growth of 6-8%. 

MDU is likely to continue witnessing 1-2% customer growth annually in the electric and natural gas segments annually through 2026. The company expects its capital expenditures to be $3.06 billion in the 2025-2029 period. These investments should increase the reliability of its services and enable it to serve an increasingly large customer base effectively.

The company is also set to gain from data center opportunities. MDU has signed electric service agreements of 580 megawatt (MW) of data center load. Of that, 180 MW is currently online, with an additional 100 MW expected to come online late this year, and the remaining is expected to continue through the next few years.

The possibility that MDU Resources will grow and get even better suggests that management will have the money to retain its shareholder-friendly programs in the future.

Utilities’ Legacy of Dividend Payment

Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends. 

In the past few months, Chesapeake Utilities Corp. CPK, The Southern Company SO and PPL Corporation PPL have raised their quarterly dividend rate by 7.8%, 2.8% and 3.8%, respectively.

The Zacks Consensus Estimate for Chesapeake Utilities’ 2025 earnings is pegged at $6.27 per share, implying a year-over-year increase of 16.3%. CPK’s current dividend yield is 2.2%.

The Zacks Consensus Estimate for Southern Company’s 2025 earnings is pegged at $4.28 per share, implying a year-over-year increase of 5.7%. SO’s current dividend yield is 3.15%.

The Zacks Consensus Estimate for PPL’s 2025 earnings is pegged at $1.82 per share, implying a year-over-year increase of 7.7%. PPL’s current dividend yield is 2.98%.

MDU Stock’s Price Performance

In the past six months, MDU Resources’ shares have lost 2.3% against the industry’s growth of 0.9%.

MDU’s Zacks Rank

MDU Resources currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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