MDU Resources expands board with two new members By Investing.com

BISMARCK, N.D. – MDU Resources Group, Inc. (NYSE: MDU), a provider of energy delivery and construction services, announced the appointment of Michael S. Della Rocca and Marian M. Durkin to its board of directors. The appointments come as the company prepares to concentrate fully on its regulated energy delivery operations through the anticipated spinoff of its construction services subsidiary, Everus Construction Group, later this year.

Della Rocca brings a wealth of experience from his 35-year tenure in the engineering and construction industry, including a significant role as chief executive for the Americas at AECOM and a partnership at McKinsey & Company. He currently operates his own firm, Della Rocca Enterprises LLC. Durkin’s background includes serving as senior vice president, general counsel, secretary, and chief compliance officer at Avista (NYSE:) Corporation, with previous legal roles at United Airlines and the law firm Briggs and Morgan.

Both new board members are set to contribute their expertise to MDU Resources’ strategic focus. Della Rocca will join the Audit and Environmental and Sustainability committees, while Durkin will participate in the Compensation and Nominating and Governance committees.

Their educational credentials are notable, with Della Rocca holding degrees in civil engineering and transportation engineering from Rensselaer Polytechnic Institute, as well as an MBA from St. John’s University. He is also a licensed professional engineer. Durkin earned her Juris Doctor and Master of Laws from Mitchell Hamlin School of Law, alongside a political science degree from Manhattanville College, and is admitted to the bar in multiple states.

The strategic shift of MDU Resources to a pure-play regulated energy delivery business is expected to be finalized with the spinoff of Everus Construction Group. This move is part of the company’s long-term planning and commitment to its core operations. The announcement also aligns with the company’s celebration of its 100th anniversary.

The information provided in this announcement is based on a press release statement and includes forward-looking statements regarding the planned spinoff and its timing. These statements are made in good faith and are believed to have a reasonable basis, but actual results could vary materially from projected outcomes.

In other recent news, MDU Resources Group Inc. has reported several significant developments. The company announced a 4% increase in its common stock dividend to 13 cents per share, reflecting its commitment to rewarding shareholders and transitioning to a regulated energy delivery business. This dividend increase aligns with MDU Resources’ long-term payout ratio goal of 60% to 70% of regulated energy delivery earnings.

In financial news, MDU Resources reported strong second-quarter earnings of $60.4 million, with notable 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 revealed plans for a tax-free spin-off of Everus later this year, as part of its focus on regulated energy delivery businesses. 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 decision to retain an equity stake in Everus post-spin-off is yet to be made, with further details to be released in a Form 10 with pro forma financial statements later in the year.

InvestingPro Insights

As MDU Resources Group, Inc. (NYSE: MDU) embarks on a strategic transformation to focus exclusively on its regulated energy delivery operations, the financial metrics and market performance of the company provide valuable context for investors. According to InvestingPro data, MDU Resources has a market capitalization of $4.95 billion, reflecting its significant presence in the industry. The company’s P/E ratio stands at 12.19, which may be considered by investors when assessing the company’s valuation in relation to its earnings.

An InvestingPro Tip that stands out is MDU’s impressive track record of maintaining dividend payments for 54 consecutive years, showcasing the company’s commitment to returning value to shareholders. This consistency is particularly noteworthy as investors often seek stable dividend-paying stocks within the utilities sector. Moreover, analysts predict the company will remain profitable this year, which is also supported by MDU Resources being profitable over the last twelve months.

Investors interested in the company’s operational performance would note the gross profit margin of 19.4% for the last twelve months as of Q2 2024, indicating the efficiency of MDU Resources’ operations relative to its revenues.

While the company is expected to concentrate on its regulated energy delivery operations, it’s important to note that net income is expected to drop this year, an InvestingPro Tip that may influence investor sentiment. Nevertheless, the strategic appointments of Michael S. Della Rocca and Marian M. Durkin to the board of directors could provide the expertise needed to navigate this transition effectively.

For those seeking a deeper analysis, InvestingPro offers additional tips on MDU Resources Group, providing a more comprehensive look at the company’s financial health and future prospects.

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