MDU Resources Group, Inc.

What they do

The company generates, transmits and distributes electricity and provides natural gas distribution, transportation and storage services through three reportable segments: electric, natural gas distribution and pipeline. Montana-Dakota comprises the electric segment; the natural gas distribution segment consists of Montana-Dakota, Cascade and Intermountain; WBI Energy is the pipeline segment. Operations are regulated by state public service commissions and/or FERC, and the company had 2,096 employees as of December 31, 2025.

Revenue drivers

• Electric — Regulated electric generation, transmission and distribution through Montana-Dakota. Contributed $64.9 million of 2025 segment income, second-largest of the three segments, and benefits from rate mechanisms tied to renewable investments such as Badger Wind Farm.
• Natural gas distribution — Regulated natural gas distribution through Montana-Dakota, Cascade and Intermountain. Contributed $56.1 million of 2025 segment income and is seasonal, posting losses in warmer quarters and gains in heating season.
• Pipeline — Natural gas transportation and storage through WBI Energy. Contributed $68.2 million of 2025 segment income, the largest segment, with growth tied to contracted capacity projects such as the proposed Bakken East Pipeline.
• Other — Includes Centennial Capital and residual corporate items; contributed $2.2 million of 2025 income and is not a core regulated operating segment.

Recent performance

Second quarter 2026 consolidated net income was $21.3 million, or $0.10 per diluted share, up 55.5% from $13.7 million and $0.07 in the second quarter of 2025. Electric segment earnings rose to $14.7 million from $10.4 million, helped by $3.3 million from Badger Wind Farm, Montana interim rates, new Wyoming rates and an 8.2% increase in retail sales volumes. Natural gas distribution posted a smaller seasonal loss of $3.9 million versus $7.4 million on new rates in Idaho, Washington, Montana and Wyoming. Pipeline earnings slipped to $14.4 million from $15.4 million. For the six months ended June 30, 2026, net income was $102.1 million, or $0.49 per diluted share, versus $95.7 million and $0.47 a year earlier.

Strategy

MDU Resources describes itself as a pure-play regulated energy delivery business pursuing organic growth under a "CORE" strategy prioritizing customers and communities, operational excellence, returns-focused initiatives and an employee-driven culture. It completed the separations of Knife River on May 31, 2023 and Everus on October 31, 2024, leaving the three regulated segments. Management is advancing the proposed Bakken East Pipeline, designed for 1.4 billion cubic feet per day, and investing in utility infrastructure including renewable generation such as Badger Wind Farm. The board has set a long-term dividend payout ratio target of 60% to 70% of regulated energy delivery earnings.

Risks

• Regulatory rate recovery — Results depend on state commissions and FERC approving timely recovery of costs and capital, and the company notes regulatory lag in aligning revenue increases with increased investments.
• Bakken East Pipeline execution and financing — The proposed $2.7 billion to $3.2 billion project requires a FERC Section 7(c) application and a final investment decision, and the company is still evaluating financing options.
• Weather and seasonality — Natural gas distribution is seasonal and swings between losses and income across quarters, as shown by a $3.9 million second-quarter 2026 loss versus $40.3 million of first-half 2026 income.
• Inflation, interest rates and tariffs — The company cites inflationary pressures, higher interest rates, tariffs, commodity price volatility and supply chain disruptions as ongoing factors affecting its business and customers.

Outlook

Management reaffirmed 2026 earnings per share guidance of $0.93 to $1.00. It expects to file the Bakken East Pipeline FERC Section 7(c) application in the fourth quarter of 2026, with Phase One in service in late 2029 and Phase Two in late 2030. The company continues to cite data center demand and development activity across its service territory as supporting infrastructure growth.