Don’t Dismiss MDU Resources Group, Inc. (MDU) Stock So Quickly

MDU Resources Group, Inc. (NYSE:MDU) is rated as Buy by analysts at Williams Capital Group. The firm was pushed by the stock performance to change their PT view from $30 to $28 on February 08. Analysts at Argus, shed their positive views on February 13 by lowering it fromBuy to Hold. The stock lost favor of Barclays analysts who expressed their lack of confidence in it using a downgrade from Equal Weight to Underweight on February 04. DA Davidson analysts came out with bearish views on February 02 when the call was made. They think the stock is now Neutral compared to to their prior call for Buy.

MDU stock dropped -0.19% in recent trade and currently has a stock-market value of $5.1B. The shares finished at $25.69, after trading as low as $25.57 earlier in the session. It hit an intraday high Thursday at $25.9. Trading activity significantly weakened as the volume at ready counter decreased to 757,930 shares versus 1,043,310 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,032,086 shares. The stock is now 13.02% above against its bear-market low of $22.73 on December 26, 2018. It has retreated -15.3% since it’s 52-week high of $29.62 reached in July. Now the market price is down -5.03% on the year and up 7.76% YTD.

Wall Street’s most bullish MDU Resources Group, Inc. (NYSE:MDU) analysts are predicting the share price to blow past $29 per share during the next 12 months. The current median share price forecast by them is $29, suggesting that the stock could increase 12.88% in that time frame. The average price target of $28 calls for a nearly 8.99% increase in the stock price.

MDU Resources Group, Inc. (MDU)’s 50 day simple moving average (SMA 50) price is $25.52 and its 200-day simple moving average (SMA 200) price is $26.7. The company’s stock currently has a total float of 194M shares. Its weekly volatility is hovering around 1.88% and felt 1.58% volatility in price over a month. On the upside, the share price will test short term resistance at around $25.87. On a downside, the stock is likely to find some support, which begins at $25.54. The failure to get near-term support could push it to $25.39.

When looking at valuations, MDU Resources Group, Inc. (MDU) has a pricey P/E of 19.14x as compared to industry average of 16.3x. Moreover, it trades for 16.04 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.96x price/book and 1.13x price/sales. Compared to others, MDU Resources Group, Inc. is in a different league with regards to profitability, having net margins of 6%. To put some perspective around this, the industry’s average net margin is 46.69%. MDU’s ROE is 10.9%, which is also considerably worse than the industry’s ROE of 13.37%. It’s also very liquid in the near term, with a current ratio of 1.2. The stock has a debt/capital of 0.82.

Shares of MDU have dropped -0.3% since the company’s most recent earnings report. Over the past 12 fiscal quarters, MDU Resources Group, Inc. (NYSE:MDU) has topped consensus earnings estimates in 6 quarters (50%), missed earnings in 6 quarters (50%), whereas at 0 occasion EPS met analyst expectations. MDU last reported earnings that receded expectations. The company raked in $0.39 per share, -95.17% change on the same period last year. That was worse than consensus for $0.42. Revenue for the recent quarter stood at $1.07 billion, up 2% on last year and below the $1.1 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $4.82 billion to $4.82 billion, which should be compared with $4.85 billion generated last year. EPS is seen in a range of $1.48 to $1.52, against the $1.52 reported a year ago.