MDU Plans to Raise $200M Through Share Issuance for Acquisition and Additional Uses
Written by Emily J. Thompson, Senior Investment Analyst
Source: NASDAQ.COM
MDU Resource Group Offering: MDU Resource Group, Inc. has announced a public offering of $200 million in equity shares, with the potential for an additional $30 million, to fund general business purposes including debt repayment and capital expenditures, while avoiding increasing its debt burden.
Impact on Earnings: The increase in shares outstanding will dilute earnings per share, adding to the existing 205.3 million shares, despite MDU's anticipated long-term EPS growth rate of 6-8% and a customer growth rate of 1-2% annually.
Industry Comparisons: MDU currently holds a Zacks Rank #5 (Strong Sell), while Atmos Energy Corporation, a competitor, has a better Zacks Rank #2 (Buy) and a long-term earnings growth rate of 7.98%.
Investment Strategies: Other companies like Sempra Energy and ONE Gas, Inc. are also focusing on capital investments and reducing reliance on equity funding, with Sempra selling non-core assets to support core U.S. growth and ONE Gas planning a $4 billion investment through 2029.
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Analyst Views on SRE
Wall Street analysts forecast SRE stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SRE is 100.58 USD with a low forecast of 89.00 USD and a high forecast of 115.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
9 Buy
3 Hold
0 Sell
Strong Buy
Current: 86.780
Low
89.00
Averages
100.58
High
115.00
Current: 86.780
Low
89.00
Averages
100.58
High
115.00
About SRE
Sempra is a North American energy infrastructure company. The Company's businesses invest in, develop and operate energy infrastructure, and provide electric and gas services to customers. Its segments include Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. The Sempra California segment provides natural gas and electric service to Southern California and part of central California through its subsidiaries, SDG&E and SoCalGas. The Sempra Texas Utilities segment holds its investment in Oncor Holdings, which owns an over 80.25% interest in Oncor, a regulated electric transmission and distribution utility serving customers in the north-central, eastern, western and panhandle regions of Texas, and its indirect 50% interest in Sharyland Holdings, which owns Sharyland Utilities, a regulated electric transmission utility serving customers near the Texas-Mexico border. The Sempra Infrastructure segment develops, builds, operates and invests in energy infrastructure.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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